Tyson Foods crashes
US stock markets are bobbing
05/08/2023 11:36 p.m
After Friday’s high, the US stock markets are starting the new week with the handbrake on. The Dow ended trading slightly lower. There is plenty of movement in the stocks of the US regional banks. Things are going really badly for the meat company Tyson Foods.
Several weak company figures spoiled the mood for investors on Wall Street at the start of the week. The Dow Jones Index the standard values closed 0.2 percent lower on Monday at 33,618 points. The tech-heavy one Nasdaq however, advanced 0.2 percent to 12,256 points. The broad one S&P 500 went out of the market hardly changed at 4138 points.
Meanwhile, US regional banks saw large swings after Friday’s rebound. The stocks of the regional bank initially gained up to 30 percent PacWest after the US lender slashed its dividend. “Given the stock’s extreme volatility recently, we believe this dividend cut makes sense and can support the pace of capital accumulation,” said analysts at RBC Capital Markets. At the end of trading, the plus melted down to an increase of 3.6 percent. Shares fell to a record low last week. The bank had previously stated that it would examine strategic options such as a sale or a capital increase.
Also at the regional banks Western Alliance and Zion the recovery cooled off from more than ten percent at times to growth of 0.6 and 2.1 percent. The titles had to give up feathers last week because investors feared further turbulence after the collapse of the First Republic Bank. The KBW Regional Banking Index was down nearly 3 percent on Monday after posting its biggest gain in seven weeks on Friday.
Curious look at inflation data
In terms of individual stocks, a surprise second-quarter loss and a cut in full-year sales guidance left shares of Tyson Foods plunged more than 16 percent to a three-year low. In view of the high inflation, consumers seem to have scaled back spending on meat. At the same time, cattle breeders struggled with increased feed costs and the drought in the USA. According to analysts at JPMorgan, Tyson’s beef business margins were the weakest since 2015. The pork and chicken businesses were also disappointing.
The investors also ran away Catalentafter the drugmaker said it would cut revenue and earnings guidance by more than $400 million each. The titles collapsed by almost 26 percent. The company, whose customers include Moderna and Johnson & Johnson, flagged issues in April and warned that a slower-than-expected ramp-up of production capacity would hurt quarterly results.
According to stockbrokers, investors are increasingly focusing on the US inflation data due on Wednesday. “We’re in an information vacuum right now, waiting for the next inflation data, and that’s why you’re seeing some of this uncertainty in the market,” said Thomas Hayes, manager at investment firm Great Hill Capital. Investors on Europe’s stock exchanges had already started the new week with the handbrake on. The leading German index, the Dax, initially stalked the 16,000-point mark again before profit-taking pushed it down 0.1 percent to 15,953 points.