Wednesday 1st February 2017
|Text too small?|
Wall Street moved lower, as did equities in Europe, amid disappointing earnings forecasts from companies including UPS and Under Armour as well as weaker-than-expected reports on US consumer confidence and Chicago-area manufacturing.
The US dollar also fell after Peter Navarro, US President Donald Trump’s top trade adviser, said Germany uses a “grossly undervalued” euro to gain a competitive advantage over trading partners. German Chancellor Angela Merkel rejected the accusation by Navarro, made in an interview with the Financial Times.
Wall Street slid. In 1.16pm trading in New York, the Dow Jones Industrial Average slid 0.8 percent, while the Nasdaq Composite Index declined 0.6 percent. In 1pm trading, the Standard & Poor’s 500 Index eased 0.4 percent.
“We may only be 11 days into the first 100 days of the new Trump administration but one thing is becoming more apparent and that is that markets are going to be continually tested in the near term by the words and actions of President Trump,” Deutsche Bank strategist Jim Reid wrote in a note, Bloomberg reported.
The Dow weakened, led by slides in shares of Goldman Sachs and those of Intel, recently down 2.2 percent and 1.8 percent respectively.
Bucking the trend were shares of Merck and Pfizer following a meeting of some of the nation’s drug makers with Trump. Trump said his intention to ease regulations and lower taxes will outweigh any negative impact from the lower drug prices he is demanding on corporate profits, according to Bloomberg.
Lilly and Merck said by email after the meeting that they were encouraged by Trump's focus on innovation, Reuters reported.
"Tax, deregulation—those are things that could really help us expand operations," Lilly CEO Dave Ricks said, according to Reuters
Shares of UPS dropped, trading 6.1 percent lower as of 1.32pm in New York, after the parcel delivery company offed a disappointing full-year profit forecast.
Shares of Under Armour sank, trading 21.6 percent weaker as of 1.33pm in New York, after the company’s full-year sales outlook fell far short of expectations.
Meanwhile, Federal Reserve policy makers began their two-day meeting, at which they are not expected to lift interest rates.
"At the moment there's incredible uncertainty surrounding fiscal policy and the potential for stimulus and the composition of that,” Paul Ashworth, an economist at Capital Economics, told Reuters. "The Fed can't react until it knows what to react to."
In Europe, the Stoxx 600 Index ended the session with a 0.7 percent fall from the previous close.
The UK’s FTSE 100 Index fell 0.3 percent, while France’s CAC 40 Index gave up 0.8 and Germany’s DAX Index dropped 1.3 percent.
No comments yet
MARKET CLOSE: NZ shares up, led by Fisher & Paykel Healthcare, Ryman
NZ dollar heads for 0.1% weekly fall with jittery markets over weaker yuan
Xero quits developing in-house US payroll product, signs up with Gusto
Farming, horticultural groups seek flexibility in zero emissions plans
Hawaiki Submarine Cable begins commercial operations
Net migration falls in June, remains historically high, Stats NZ says
Commerce Commission files proceedings against Wilson Parking, seeks penalty
SeaDragon's funding transaction unfair but positives outweigh negatives, say independent advisers
Morningstar cuts earnings forecast for Z Energy but maintains hold rating
July 20th Morning Report