US stocks fall after the release of more corporate earnings

                

US stocks slid Wednesday as investors returned focus to the latest batch of corporate earnings. Wall Street also continued to weigh the outlook for future Federal Reserve policy moves. With the US reporting season still playing out – rising interest rates are starting to affect earnings.

Whilst 69 per cent of the S&P 500 companies have reported fourth-quarter earnings so far that have beat analyst expectations, that is post many analysts lowering their expectations for the quarter amid rising concerns about the health of the economy.

Overnight the Dow Jones Industrial Average fell by 213 points, or 0.6 per cent. The S&P 500 slid 1.1 per cent, while the Nasdaq Composite dropped 1.7 per cent.

In earnings news, Mexican fast food chain, Chipotle, slid more than 5 per cent after missing expectations on the top and bottom lines in its latest results. Lumen Technologies tumbled 21.3 per cent after it reported a fourth-quarter loss of $3.1 billion and gave guidance for the year that was under Wall Street expectations.

Meanwhile, CVS and Uber each gained more than 4 per cent on the back of earnings that came in above Wall Street estimates.

Unrelated to earnings, shares of Google parent Alphabet were down more than 8 per cent on Wednesday, wiping billions of dollars off its market value, as Wall Street digested the potential damage to its search dominance and profits from a new artificial intelligence battle with Microsoft.

In EV news, China’s passenger car sales slumped 38 per cent in January, reversing a 2.4 per cent gain in the previous month, industry data showed on Wednesday, as demand weakened after a tax cut on combustion engine cars and subsidies on electric vehicles (EV) expired. Sales of new energy cars that include pure battery EVs and plug-in hybrids also fell 6.3 per cent in January after a blistering 90 per cent growth in 2022.

All sectors lower, with big tech a drag. The S&P 500 sectors finished lower overnight due to a weak performance from FANMAGs, retail/apparel, restaurants, utilities and meme stocks. On the other hand, the auto sector is performing well, along with managed care, large-cap pharma, select distributors, and several while media, oil services, and steel are also holding up.

In commodity news, Indonesia has become the second largest producer of the battery material cobalt according to US government data, outpacing countries like Russia and Australia. Indonesia already produces half of the world’s nickel and is expected to increase its share of global cobalt output to almost 20 per cent by 2030.

Futures

The SPI futures are pointing to a 0.4 per cent fall.

Currency

One Australian dollar at 8:10 AM has weakened compared to the US dollar yesterday buying 69.24 US cents (Wed: 69.52 US cents).

Commodities

Iron ore futures are pointing to a 1.2 per cent gain.

Gold added 0.2 per cent. Silver gained 0.7 per cent. Copper lost 0.9 per cent and oil gained 1.6 per cent.

Figures around the globe

Across the Atlantic, European markets closed mixed. London’s FTSE added 0.3 per cent, Frankfurt gained 0.6 per cent while Paris closed 0.2 per cent lower.

In Asian markets, Tokyo’s Nikkei lost 0.3 per cent, Hong Kong’s Hang Seng fell 0.1 per cent while China’s Shanghai Composite closed 0.5 per cent lower.

Yesterday, the Australian sharemarket closed 0.4 per cent higher at 7,530.

Ex-dividends

Virgin Money UK PLC (ASX:VUK) is paying 13.3571 cents unfranked

Dividends payable

Centuria Capital Group (ASX:CNI)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.