3M slump keeps Wall Street under pressure، tech offers support
Thursday 25/April/2019 - 05:17 PM
U.S. stocks slid on Thursday، weighed down by dismal reports from industrial companies including 3M، however strong earnings from Facebook and Microsoft، which hit the trillion-dollar valuation mark، kept the tech-heavy Nasdaq afloat، according to Reuters.
3M Co shares tumbled 9.8% after the Post-It notes maker reported a lower-than-expected quarterly profit، cut its 2019 earnings forecast and said it would lay off 2،000 workers globally.
The S&P industrial sector dropped 1.8%، also dragged lower by a 7.3% fall in United Parcel Service Inc’s shares following the company’s disappointing profit.
On the other hand، Facebook Inc jumped 6.7% after the social media giant’s quarterly profit blew past analysts’ profit estimates.
Microsoft Corp gained 4.2% after the software company beat estimates for quarterly results and predicted continued growth for its cloud computing business.
“Facebook and Microsoft are prominent names and you would think that they’d be able to put the market on their shoulders and pull it higher، but 3M is a little more indicative of the global economy because its products are sold ubiquitously،” said Mark Luschini، chief investment strategist at Janney Montgomery Scott in Philadelphia.
Investors are assessing earnings from some of the biggest U.S. companies this week to see if the strong run-up in stocks since the start of the year is justified as the main Wall Street indexes hover near all-time highs.
The S&P 500 is 0.5% below its record high hit in late September.
“We’re deep enough in earnings season to know what the pattern is، and that is much better than expected، so they’ve done what they can do to hold the markets in،” said Luschini.
Since the start of first-quarter earnings season، estimates for profits at the S&P 500 companies have improved from 2.3% decline to a flat reading as of Thursday.
At 10:00 a.m. ET the Dow Jones Industrial Average was down 212.80 points، or 0.80%، at 26،384.25، the S&P 500 was down 2.78 points، or 0.09%، at 2،924.47 and the Nasdaq Composite was up 36.67 points، or 0.45%، at 8،138.69.
Amazon.com Inc، among the big names set to report after market close، was up 0.8%.
Among the biggest gainers in the tech sector was Lam Research، which jumped 6.2% after the semiconductor equipment maker reported better-than-expected quarterly results.
A big decliner was Xilinx Inc، which tumbled 13.6% after the programmable chipmaker’s quarterly gross margins fell short of estimates.
Altria Group Inc fell 4.3% after the maker of Marlboro cigarettes reported disappointing results.
Economic data was mixed on the day، with new orders for U.S.-made capital goods increasing by the most in eight months in March، but another report showed initial jobless claims increased by the most in 19 months last week.
Declining issues outnumbered advancers for a 2.27-to-1 ratio on the NYSE and a 1.59-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and three new lows، while the Nasdaq recorded 29 new highs and 25 new lows. Edited by: Ahmad El-Assasy