Wall Street in disarray after disappointing retail sales

(New York) The New York Stock Exchange was trading in disarray on Thursday, marking time the day after a rebound in the indices, and after disappointing retail sales in the United States in January.

The Dow Jones index advanced 0.44%, the technology-dominated NASDAQ lost 0.25% and the S&P 500 rose 0.17% around 10 a.m. (Eastern time).

On Wednesday, the NASDAQ rose 1.30% to 15,858.15 points and the broader S&P 500 index gained 0.96% to 5,000.62 points. The Dow Jones gained 0.40% to 38,424.27 points.

U.S. retail sales started 2024 down, below analyst expectations.

Purchases by American households thus fell by 0.8% in January compared to the previous month, due to a reduction in purchases of automobiles and construction materials in particular. Analysts expected a more modest decline, of around 0.2%, according to the consensus published by Briefing.com.

December data was also revised downwards, with sales increasing by only 0.4%, compared to 0.6% initially announced.

“The fall in retail sales (…) should temper recent suggestions that we are seeing a resurgence in the economy,” said Andrew Hunter of Capital Economics.

“Consumption declined in January and even if there is a small rebound in February and March, we should expect a sharp slowdown in growth in the first quarter,” added the analyst.

Bond yields fell on the news, with the ten-year rate sliding to 4.21% from 4.25% the day before.

Other indicators were mixed. Industrial production in January, measured by the Fed, fell by 0.1% in January, mainly depressed by the construction sector.

In contrast, regional Federal Reserve surveys of the Philadelphia and New York (Empire State) regions saw manufacturing activity improve.

“This data follows a worse-than-expected U.K. GDP performance and Japan falling into recession,” noted Art Hogan of B. Riley Wealth Management.

In the fourth quarter, Japanese GDP contracted again (-0.1% over one quarter). The UK entered recession in the second half of last year, with its Gross Domestic Product falling by 0.3% in the fourth quarter.

Announcements of results began to become rarer.

The world leader in agricultural equipment Deere, which recorded an 11% decline in its quarterly net profit and lowered its projections for the current financial year, fell by 3.78%.

The telecommunications giant Cisco, which announced the loss of several thousand jobs, lost 2.58%.

The California-based company reported revenue of $12.8 billion in the quarter that ended at the end of January, a decline of 6% compared to the same period last year.

It also reported a profit of $2.6 billion, a decline of 5%.

Cryptocurrency trading platform Coinbase soared more than 6% as bitcoin continued to rise, recently surpassing the $50,000 threshold for the first time in more than two years.

Coinbase is scheduled to announce its quarterly results after the market close.

Apple was losing ground (-1.12%) while Berkshire Hathaway, Warren Buffett’s investment fund, reduced its shares in the iPhone manufacturer.

The entertainment group Paramount Global (CBS) also lost ground (-1.82%) for the same reasons.

reference: www.lapresse.ca

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