Wall Street opens down after record-breaking session

Bullish earnings and economic data catapaulted New York's S&P 500.— Reuters pic
Bullish earnings and economic data catapaulted New York’s S&P 500.— Reuters pic

LONDON, April 24 — opened slightly down today after a record-breaking session the day before failed to spark a major global rally.

Bullish earnings and economic data catapulted New York’s S&P 500 and tech-heavy Nasdaq indices to all-time peaks yesterday, while the Dow Jones Industrial Average also came close.

A string of better-than-forecast results from the likes of Coca-Cola, Twitter and Lockheed Martin  added to a raft of other recent reports that suggest the US economy—the world’s biggest—is in rude health.

However the surge failed to translate into significant gains in markets around the globe, and a mixed round of fresh earnings results led to a dip at the opening bell today. 

“The trading tone is a little more subdued following a heavy slate of earnings results since yesterday’s close,” Briefing.com analyst Patrick O’Hare said.

Among the disappointing results was Boeing, which reported significantly lower profits and scrapped its full-year profit forecast after two deadly crashes led to the global grounding of its 737 MAX 8 planes.

 ‘Feelgood factor’ fades

Oanda analyst Craig Erlam said that while yesterday saw a batch of positive results, “it’s not yet clear whether it’s an outlier or a sign of what’s to come”. 

“The boost has only been seen domestically and even here, the feelgood factor has already faded,” Erlam told AFP in London.

“I think we need more evidence that the better results are more widespread before the ripple effect spreads beyond the United States.”

US markets have been boosted after the Federal Reserve last month hinted that it will not raise interest rates again this year, having signalled as recently as September that it expected to raise them three times.

In Europe, London stocks dropped by 0.8 per cent amid ongoing Brexit uncertainty, while Paris also sank.

Frankfurt however rose 0.4 per cent, aided by soaring first-quarter revenues and profits for German software and cloud computing giant SAP.

Asian markets mostly rose.

“Although investors might have hoped that record highs in the US would prompt gains in the rest of the world, the current lack of correlation across global markets means that there is less read-across than usual,” Interactive Investor analyst Rebecca O’Keeffe told AFP.

“Suggestions that leaders within ’s ruling party will focus on economic reforms and will hold back on unnecessary stimulus is dampening market sentiment in Asia.”

On oil markets, both main contracts ticked upwards slightly after hitting six-month highs on the back of news that Washington would end a waiver for several countries from US sanctions on Iran.

Prices had already been surging on hopes for the China-US talks and for an output cap by OPEC and Russia. Unrest in Libya and Venezuela has further propped up prices.

There has been speculation OPEC kingpin Saudi Arabia could step in to fill the void left in the market by the removal of Iranian crude, which would temper prices.

But Saudi Khalid al-Falih said today that the kingdom has no immediate plans to raise its . — AFP

Source: The Malay Mail Online

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