U.S. Stocks Pulling Back Sharply As JPMorgan Chase Disappoints
April 12 2024 - 4:21PM
IH Market News
Following the notable rebound seen in the previous session,
stocks have shown a significant move back to the downside during
trading on Friday. The major averages have all slid firmly into
negative territory, with the Dow falling to a two-month intraday
low.
Currently, the major averages are just off their worst levels of
the day. The Dow (DOWI:DJI) is down 352.19 points or 0.9 percent at
38,106.89, the Nasdaq (NASDASQI:COMP) is down 217.48 points or 1.3
percent at 16,224.72 and the S&P 500 (SPI:SP500) is down 52.83
points or 1.0 percent at 5,146.23.
A steep drop by JPMorgan Chase (NYSE:JPM) is weighing on the
markets, as the financial giant has plunged by 5.8 percent to its
lowest intraday level in well over a month.
JPMorgan Chase is under pressure after reporting better than
expected first quarter results but providing disappointing guidance
for net interest income, a key profit metric.
Shares of Citigroup (NYSE:C) have also moved to the downside
even though the company reported first quarter results that
exceeded analyst estimates.
Inflation concerns also continue to weigh on the markets, as the
Labor Department released a report showing import prices in the
U.S. increased by slightly more than expected in the month of
March.
The report said import prices climbed by 0.4 percent in March
after rising by 0.3 percent in February. Economists had expected
import prices to increase by another 0.3 percent.
Import prices also rose by 0.4 percent compared to the same
month a year ago, marking the first year-over-year increase since
January 2023.
Meanwhile, the Labor Department said export prices rose by 0.3
percent in March after climbing by a revised 0.7 percent in
February. The increase in export prices matched economist
estimates.
Compared to the same month a year ago, export prices were down
by 1.4 percent in March following a 1.8 percent slump in
February.
Stocks saw further downside after the University of Michigan
released preliminary data showing a bigger than expected decrease
in consumer sentiment in April along with an increase in inflation
expectations.
The University of Michigan said its consumer sentiment fell to
77.9 in April from 79.4 in March. Economists had expected the index
to edge down to 79.0.
The report also said year-ahead inflation expectations rose to
3.1 percent in April from 2.9 percent in March, climbing just above
the 2.3-3.0 percent range seen in the two years prior to the
pandemic.
Long-run inflation expectations also increased to 3.0 percent in
April from 2.8 percent in March, the University of Michigan
said.
Surveys of Consumers Director Joanne Hsu said the uptick in
inflation expectations reflects “some frustration that the
inflation slowdown may have stalled.”
Sector News
Airline stocks have shown a substantial move to the downside on
the day, with the NYSE Arca Airline Index plummeting by 3.9 percent
to a two-month intraday low.
Significant weakness is also visible among semiconductor stocks,
as reflected by the 2.9 percent plunge by the Philadelphia
Semiconductor Index.
Computer hardware stocks are also seeing considerable weakness,
resulting in a 2.3 percent slump by the NYSE Arca Computer Hardware
Index.
Networking, software and banking stocks have also shown notable
moves to the downside, while gold stocks are bucking the downtrend
amid a sharp increase by the price of the precious metal.
Other Markets
In overseas trading, stock markets across the Asia-Pacific
region moved mostly lower on Friday. Hong Kong’s Hang Seng Index
plunged by 2.2 percent and China’s Shanghai Composite Index fell by
0.5 percent, although Japan’s Nikkei 225 Index bucked the downtrend
and crept up by 0.2 percent.
Meanwhile, the major European markets have turned mixed on the
day. While the U.K.’s FTSE 100 Index is up by 1.1 percent, the
German DAX Index and the French CAC 40 Index are both down by 0.2
percent.
In the bond market, treasuries have moved back to the upside
after ending the previous session slightly lower. Subsequently, the
yield on the benchmark ten-year note, which moves opposite of its
price, is down by 8.7 basis points at 4.489 percent.
SOURCE: RTTNEWS
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