4:05pm: Stocks take a dive at the close
Investors saw a sea of red at the closing bell Thursday ahead of a holiday weekend, as inflationary pressures and future Fed policy decisions continued to weigh down the markets.
At the close, the S&P 500 was down 1.2% at 4,393 points, while the Dow Jones fared a bit better with a more modest 0.3% loss to finish at 34,451. The Nasdaq suffered heavier losses, falling 2.1% to hit 13,351 points.
12:05pm: Wall Street a mixed bag
US stocks were little changed Thursday at noon after investors caught a glimpse of mixed quarterly reports from Wells Fargo, Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and Citigroup.
Wells Fargo saw Q1 revenues fall short of estimates coming in at $17.6 billion, and net income fell short at $9.2 billion, while Goldman Sachs (NYSE:GS) outperformed the big banksnet with quarterly revenue of $12.93 billion, beating expectations by over $1 billion.
The main indicies quietly digested the results. At noon, the S&P 500 was down 0.6% at 4,420 points, while the Dow was slightly ahead with a 0.1% increase at 34,601 points. The Nasdaq was bringing up the rear, falling 1.4% to hit 13,449 points after Twitter announced an all-staff emergency meeting Thursday afternoon to discuss Elon Musk's hostile takeover bid.
"The big question for the Twitter board now is whether to accept a very generous offer for a business that has been a serial underperformer, and tends to treat its users with indifference," Michael Hewson, Chief Market Analyst at CMC Markets UK said.
"Early share price action appears to suggest little enthusiasm on the part of investors with the shares opening below $50 and struggling to make any sort of traction. This seems rather an odd reaction unless you believe that the board will reject Musk’s offer, or you believe Musk isn’t serious about his offer. In any event a rejection could then prompt Musk to sell his shareholding, sending the share price back down to where it came from. Given the recent share price performance of Twitter they ought to be ripping his arm off, because it’s unlikely they will get a better offer from anybody else."
10.20am: Proactive North America headlines:
Elon Musk launches indicative bid for Twitter
Clean Air Metals strengthens ties with First Nations partners in Thunder Bay North region through a new exploration agreement
Hillcrest says its high-efficiency inverter allows ‘impressive’ improvement in electric motor efficiency
Delta 9 Cannabis strikes deal to become one of Manitoba's first licensed cannabis distributors
Great Panther Mining says it is on track to achieve its 2022 production targets, reports 1Q results
TomaGold seeing good results from Obalski drilling, reveals significant gold intersections
Nextech AR unveils 'milestone' Metaverse Suite to roll its 3D and AR products into one platform
Silvercorp Metals releases fiscal 2022 production; reiterates production guidance for 2023
The Valens Company (TSX:VLNS, OTCQX:VLNCF) sees fiscal 1Q net revenue rise by 26.1% as its diversified cannabis business lines gain traction
Mandalay Resources on track to reach 2022 production guidance after solid first quarter
Tocvan says Phase III core drilling at Pilar confirms significant grade and distribution of gold-silver mineralization
Golden Minerals Company (NYSE-A:AUMN, TSX:AUMN, ETR:7GB) produces 3,787 gold-equivalent ounces in first quarter of 2022
Wellbeing Digital Sciences (NEO:MEDI.AQN, OTCQB:KONEF) announces start of a global and comprehensive strategy
Looking Glass Labs appoints Tom Sweeney to advisory board
Marvel Discovery commissions airborne magnetic survey over KLR and Walker Uranium Project in Athabasca Basin
9.45am: US shares start ahead
US stocks started ahead but muted on Thursday as traders mulled over the latest big bank earnings and pondered more over high inflation.
The Dow Jones Industrial Average added around 177 points at 34,742, while the S&P 500 gained around 12 points to stand at 4,458.
The tech-laden Nasdaq index advanced around 11 points to go to 13,654.
It comes as there was more news of price jumps. In the US, the cost of imported goods such as oil and food rose 2.6% in March, according to a new report. Economists had expected a 2.2% rise. Meanwhile, export prices rose 4.5% in the same month and up 18.8% over the last year.
Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and Wells Fargo all posted first-quarter earnings on Thursday.
Morgan Stanley (NYSE:MS) rose over 3% as it unveiled an earnings beat but Wells Fargo dropped over 5.7% after its first-quarter revenue that fell short of analyst estimates. Goldman shares added almost 2%.
6.35am: Wall Street seen little changed
US stocks are seen little changed in early trading as investors await the release of quarterly earnings from the biggest US banks.
Analysts said investors will be looking for clues as to how these financial institutions have weathered inflationary pressures in the first quarter as well as their outlook for the industry for the rest of the year.
Futures for the Dow Jones Industrial Average rose 0.21% in pre-market trading, while those for the S&P 500 fell 0.01% and contracts for the tech-heavy Nasdaq-100 were 0.06% higher.
Yesterday, apart from JPMorgan, whose first-quarter profit dove from a year earlier, driven by increased costs for bad loans and the market upheaval caused by the Russian-Ukraine war, others such as BlackRock and Delta performed better than analysts’ expectations.
Richard Hunter, Head of Markets at interactive investor, said alongside slightly lighter volumes which have traditionally accompanied a shortened trading week leading into Easter, the quarterly earnings season is kicking off in earnest as US banks begin to report.
“Inflationary pressures such as energy and labour costs are expected to pressure earnings, which are unlikely to scale the heights of last year. While there are expected to be some strong numbers emanating from the energy and materials sectors, the likes of consumer discretionary and communication stocks may be feeling the pressure more than most,” he added.
A decent showing within the airline sector offset some of the disappointment from JPMorgan, whose numbers set the season off to a weak start as it reported a drop in quarterly profit, Hunter noted.
JPMorgan shares closed more than 3% lower on Wednesday after the biggest US bank by assets said first-quarter profit fell 42% from a year earlier to US$8.28 billion, but analysts said banks reporting today such as Citigroup, Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and Wells Fargo may not go the way of JPMorgan.
“The mood has lifted slightly as investors begin to assess the possibility that inflation could be nearing a peak,” Hunter said. “While the overall inflation number continues to run hot, core inflation – which strips out food and energy prices – saw gains which appear to be moderating in comparison to recent readings. This, in turn, raises the question of whether much of the negative news has already been priced into stocks, although the situation remains fluid.”
However, the performance of the main indices remains weak, he noted, with the Dow Jones Industrial Average losing 4.9% in the year to date, the S&P500 down 6.7% and the Nasdaq-100 12.8% lower.
Traders will also be looking towards US retail sales figures for March and weekly jobless claims, due later this morning.
On commodity markets, Brent crude, the international oil benchmark, was 0.98% lower at $107.71 a barrel, while gold prices were down 0.6% at 1,972.80.
Contact the author at stephen.gunnion@proactiveinvestors.com