Dow Jones closes in the red
Losses in tech stocks are weighing on stock market sentiment
October 26, 2023, 11:19 p.m
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The prospect of high costs and regulatory pressure is depressing the stocks of Facebook and Instagram parent company Meta, and other tech stocks are also slipping into the red. Meanwhile, the guesswork surrounding the development of the conflict between Israel and Hamas is keeping investors on the oil market busy.
Share price losses at major technology companies have pushed Wall Street into the red. The Dow Jones Index the standard values closed 0.8 percent lower at 32,784 points. The technology-heavy one Nasdaq fell 1.8 percent to 12,595 points. The broad one S&P 500 lost 1.2 percent to 4137 points. Meta in particular had a negative impact on the mood. According to figures, the shares of the Facebook parent collapsed by almost four percent. The group expects higher expenses and regulatory pressure in the coming year. The shares of other technology giants such as Microsoft, Tesla, Amazon, Nvidia and Google parent Alphabet were also down by up to 3.8 percent.
Positive economic data only partially limited the losses in the major indices. The US gross domestic product (GDP) increased by 4.9 percent annually from July to September. This is the largest rate of increase in almost two years. “The US Federal Reserve Bank is primarily looking at the labor market and consumer prices to decide how much it should increase interest rates in order to slow down inflation without stalling the economy. And these currently point to a break in interest rates until the end of the year ,” said Thomas Hayes, chairman of private equity firm Great Hill Capital.
However, Brent Schutte, a manager at asset manager Northwestern Mutual, was skeptical. “The Fed will only take the pressure off the economy when the last embers of inflation have gone out,” said the expert. Meanwhile, investors in the oil market were left guessing about the further development of the conflict between Israel and Hamas. A decision by the Israeli military to postpone the planned ground offensive in Gaza for the time being pushed down the price of North Sea crude oil and light US oil by around two percent each to $88.30 and $83.55 per barrel (159 liters). Prices were also depressed by a rise in US inventories and the strong dollar. “However, the fluctuations in the oil market have primarily to do with the Hamas-Israel war,” said Tina Teng, analyst at broker CMC Markets.
At the same time, investors turned their attention to a number of disappointing corporate balance sheets. “We’re seeing a lot of pressure following corporate reports that have missed investors’ expectations – especially for companies that were hopeful at the beginning of the year,” said Greg Bassuk, CEO of asset manager AXS Investments in New York. Something flew out of the depots Mastercard. The credit card provider’s papers lost 5.6 percent. The group significantly increased revenues and profits in the third quarter. However, he forecast weaker-than-expected growth in net income for the fourth quarter.
A forecast below expectations also depressed shares UPS, which slipped by almost six percent. Results above expectations support this IBM. The IT group’s papers gained almost five percent. What was asked were against it Merck with an increase of almost two percent. The US pharmaceutical company’s corona drug is selling better than expected. As the company announced, sales of molnupiravir rose 47 percent to 640 million euros in the third quarter, significantly exceeding analysts’ estimates of 120 million dollars. For the full year, Merck now expects sales of $1.3 billion for the drug marketed under the name Lagevrio.