Dow closes almost unchanged
Microsoft figures unsettle investors
01/25/2023 11:21 p.m
Disappointing numbers from Microsoft are dampening expectations for the earnings season on Wall Street. The Dow recovers during the course of the day after initial losses, but there is little demand for tech stocks. Things are going well for Cessna builder Textron.
Disappointing figures and Microsoft’s less than optimistic forecast dampened the mood of US investors on Wednesday. the Dow Jones stagnated at 33,744 points. The tech-heavy one Nasdaq fell 1.2 percent to 11,313 points and the broad S&P 500 closed almost unchanged at 4016 points.
“Equities are back in the red as investors appear to be bracing themselves for a disappointing earnings season from the big tech companies,” said market strategist Craig Erlam of trading house Oanda. “Earnings painted a more realistic picture of the outlook for this year as investors seemed to convince themselves that was the case. Layoffs, missed headlines and poor forecasts are fast becoming the norm.” The results from the major US banks that opened the accounting season were “not particularly good” and likely set the tone for the season, Erlam said.
Next up are the big tech companies, and if Microsoft has its way, investors are in for another bumpy ride. “The cloud business has been a hugely important area of growth for the company, and the prospect of that growth slowing at a time when the company has announced plans to lay off 10,000 employees is worrying.”
The share of Microsoft lost up to 4.6 percent, then closed down 0.6 percent. The group warned that growth in its promising cloud business could stall. In the past quarter, it grew as expected by 31 percent. However, this is the smallest increase since 2015.
The demand for private aircraft, which remained high even after the corona crisis, boosted the shares of the Cessna manufacturer Textron. The titles of the US aircraft manufacturer rose by almost 0.8 percent in New York. Textron anticipates higher sales in 2023 than the market had anticipated. In the past quarter, too, revenue was higher than expected, the group said.
Media group Newscorp says it has ended merger talks with Fox Corp. The merger was “not optimal” for the shareholders, according to a mandatory announcement on Tuesday after the stock exchange closed. the Newscorpshares then climbed by 5.7 percent and the papers of Fox Corp gained 2.5 percent. With the merger, media mogul Robert Murdoch tried to revive his empire after almost a decade.
An unexpectedly strong increase in US oil stocks slowed down oil prices. The US variety STI fell by half a percent to $86.40 per barrel (159 liters). Otherwise, the reopening of China after the strict Covid restrictions makes investors optimistic. “Expectations that China’s fuel demand will recover in the second half of the year are growing and should support market sentiment,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.