While you were sleeping: Goldman Sachs, J&J disappoint

Wednesday 19th April 2017

Wall Street slid amid disappointing results including from Goldman Sachs and Johnson & Johnson.

In 2.52pm trading in New York, the Dow Jones Industrial Average slid 0.6 percent, while the Nasdaq Composite Index declined 0.2 percent. In 2.37pm trading, the Standard & Poor’s 500 Index fell 0.2 percent.

Slides in shares of Goldman Sachs and those of Johnson & Johnson, recently down 4.5 percent and 3.6 percent respectively, led the decline in the Dow.

"Those tend to be companies who manage earnings a little better, the fact they have missed perhaps isn’t a very good indication," Tim Ghriskey, chief investment officer of Solaris Asset Management in New York, told Reuters.

"There is some nervousness out there about the economy, geopolitical issues and general unpredictability as well,” Ghriskey added.

Goldman Sachs reported first-quarter earnings that fell short of the mark, a performance that puzzled analysts.

"I'm still confused," UBS analyst Brennan Hawken told Reuters, adding, "I have some company."

Shares of Johnson & Johnson dropped after the world’s top health-care company posted quarterly sales and a full-year outlook that fell short of expectations.

Cowen & Co analyst Joshua Jennings called the results an “underwhelming performance,” in a note to investors, Bloomberg reported.

Johnson & Johnson, which said it still expects to close its US$30 billion acquisition of Actelion in the current quarter, also offered a 2017 full-year outlook that disappointed.

"The expected benefit from the Actelion acquisition this year came in lower than our estimates," Edward Jones analyst Ashtyn Evans told Reuters. "Additionally, the company's total growth came in lower than we expected, which is disappointing."

Shares of Post Holdings dropped after the US cereal maker agreed to buy the UK’s Weetabix from China's Bright Food Group for 1.4 billion pounds (US$1.76 billion), the companies said.

Founded in 1932, Weetabix holds the number two overall position in the UK ready-to-eat cereal category. The company’s portfolio includes the iconic namesake Weetabix brand, as well as Alpen, Barbara’s, Weetos and Ready Brek.

“Combining together two category leaders continues our strategy of strengthening our portfolio in stable categories and diversifying into new markets, bringing much-loved brands to significantly more customers globally," Rob Vitale, Post’s CEO, said in a statement. "We are excited about the growth opportunities that this acquisition brings.”

Shares of Post Holdings traded 4.6 percent weaker as of 1.52pm in New York.

The deal is expected to be completed in the third quarter of the 2017 calendar year.

In Europe, the Stoxx 600 Index ended the day with a 1.1 percent decline from the previous close, after UK Prime Minister Theresa May unexpectedly called for a general election in June, in an effort to garner additional support for the nation’s negations to exit the European Union.

Germany’s DAX Index slid 0.9 percent, while France’s CAC40 Index fell 1.6 percent, and the UK’s FTSE 100 Index dropped 2.5 percent.

(BusinessDesk)

Comments from our readers

No comments yet