Fears of an imminent recession are easing somewhat, and some encouraging corporate results are drawing investors back to Wall Street on Thursday. However, a fall in the price of Facebook's parent company Meta is weighing heavily on technology stocks.
Wall Street was inconsistent on Thursday. New quarterly figures were mostly on the positive side. However, third-quarter GDP was better than expected, which could fuel interest rate concerns. A price index published at the same time signaled slower price pressure. This gave rise to vague hopes of a less tight monetary policy. The Dow Jones index gained 0.6 percent, the S
Participants spoke of a rather cautious business, because the technology giants Apple and Amazon should present business figures in the evening after the market close. It should also be Intel's turn. The day before, disappointing earnings figures from technology companies such as Alphabet and Microsoft had slowed the market and pulled the Nasdaq indices down in particular. Late in the evening after the market closed, Meta came with disappointing figures.
Traders complained that their high valuations made these companies very vulnerable to any signs of structural or cyclical problems. "The realization that the power of big tech companies is not immune to the economic slowdown has taken hold. Hopes that they would show resilience this US accounting season have been dashed," said Susannah Streeter, an analyst at Hargreaves Lansdown.
The figures from Caterpillar (7.7%) were very well received. The construction equipment maker reported higher adjusted earnings on strong demand. Honeywell stock (3.3%) was boosted by an elevated outlook. Also Merck
Meta reacted to the number ID with a price slump of almost 25 percent. The Facebook parent company posted another decline in sales in the third quarter due to weak income from digital advertising. In addition, the profit fell short of expectations. Ford rose 1.6 percent. A write-down in the billions pushed the US automaker into the red in the third quarter, but the adjusted group performed better than expected.
The second strongest value in the Dow was Boeing with a plus of 4.5 percent. After stocks fell sharply on Wednesday in response to the aircraft manufacturer's disappointing financial results, investors are now banking on positive news at the investor event on November 2nd.
The dollar rose against the euro on the ECB interest rate decision. While the rate hike came in as expected at 75 basis points, the "less aggressive" tone suggested markets.com's Neil Wilson said fewer rate hikes were needed. The euro fell back below parity, trading at around $0.9970.
The bond market turned positive on the GDP data. The ten-year yield slipped back below the 4 percent mark. While US GDP was higher than expected, non-inventory private domestic demand, a kind of core GDP, stagnated in the third quarter, LBBW pointed out. In addition, a price index developed more slowly than expected. Economists also attributed the slightly better GDP to a high US trade surplus, which is unlikely to last as a strong dollar meets a slowing economy.
Oil prices edged higher on strong GDP data, extending some of their gains from the week.
