Markets Defused is an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- Next’s surprisingly good sales … here’s what the market said
- Wall Street stocks crashed on America’s weak jobs market
- BA-owner see shares take-off thanks to dividend return
- Intel stock nosedived on aggressive $10bn cost-cutting plan
Next’s surprisingly good sales … here’s what the market said
Next PLC (LSE:NXT) was a standout UK stock this past week, with a ‘surprise’ strong performance revealed in Thursday’s trading update.
Outsized growth abroad was the focus of a lot of the analysis, whilst in the UK, the retailer had to contend with cost-of-living concerns and wash-out weather
Anyway, without further ado, here’s what the market’s top commentators had to say about it.
Wall Street stocks crashed on America’s weak jobs market
Dow Jones, the S&P 500 and Nasdaq all plummeted on Friday, shook as the American economy added only 114,000 nonfarm payroll jobs in July - versus a predicted 175,000. The unemployment rate rose to 4.3%, its higher level since October 2021.
The Dow lost 816 points or 2% to 39,540, the S&P 500 slipped 116 points or 2.16% to 5,328 and the Nasdaq fell 432 points or 2.52% to 16,761.
Out in the market, meanwhile, there were some stock-specific factors dragging some stocks down – notably, big hitters like Amazon and Intel were down due to disappointing earnings.
Amazon was down 9% to $167.17, and Intel shed 27% to $21.15.
Completing the trifecta, the market is also in second guessing mode as they eye the Federal Reserve, after the US central bank chair Chair Jerome Powell hinted that a rate cut in September is possible, depending on future economic data.
BA-owner see shares take-off thanks to dividend return
British Airways owner International Consolidated Airlines Group SA (LSE:IAG) shares traded higher on Friday, rising more than 5%, after it announced will pay its first dividend since the pandemic.
It also announced it has decided to bail out of a €500 million deal to acquire Spanish airline after IAG (which as well as BA also owns Iberia, Aer Lingus and Vueling) encountered friction on the anti-trust side, after the European Commission launched a probe into the deal back in January.
Meanwhile, quarterly financial results, released after Thursday’s close, revealed that operating profit ahead of market expectations at £1.2 billion – albeit it had reduced year-over-year from €1.2 billion in the same period of 2023.
Revenue for the second quarter climbed 7.7%, whilst the total for the first six months of the year improved by 2.8% to €14.7 billion. Free cash flow for the half amounted to €3.2 billion.
For shareholders, IAG is to pay out a 3 cents per share interim dividend.
In London, on Friday, shares in BA’s parent company had climbed 9.35p or around 5.9% changing hands at 169.35
Intel stock nosedived on aggressive $10bn cost-cutting plan
Intel Corp (NASDAQ:INTC, ETR:INL) shares nosedived in Friday’s deals, losing 27%, after news of huge job cuts added to earning’s headaches that emerged with last night’s earnings.
The microchip firm is axing more than 15,000 jobs as part of a plan to cut costs by $10 billion. It also announced it would suspend its dividend payout for shareholders, starting in the fourth quarter.
Intel’s earnings report for its second quarter, released after Thursday’s close, missed market expectations for both sales and profit. Revenue totalled $12.8 billion, below the forecasted $12.9 billion, and earnings per share were 2 cents, which was below the expected 10 cents.
Looking ahead, Intel pitched new and lower revenue guidance for its third-quarter, anticipating between $12.5 billion to $13.5 billion, versus analyst consensus of $14.4 billion.
In New York, Intel stock was down $7.99 or 27.5% at $21.07.