© Reuters. File photo: The front of the New York Stock Exchange (NYSE) was seen in New York, USA on February 12, 2021. REUTERS/Brendan McDermid/File Photo
Authors: Noel Randewich and Devik Jain
(Reuters)-The Nasdaq Index closed lower on Thursday, dragged down by Apple (NASDAQ:), Amazon (NASDAQ:) and other large technology companies because of weekly unemployment The fall in relief application data has intensified investor concerns about the recent surge in inflation.
Nvidia (NASDAQ:) fell 4.4%, and Amazon fell more than 1%. These two companies contributed the most to Nasdaq’s decline. Facebook (NASDAQ:) fell 0.9%.
The technology stock index fell 0.8%, ending four consecutive days of gains. Earlier this week, investors’ preference for heavyweight growth stocks pushed the S&P 500 and Nasdaq to record highs.
The S&P 500 energy sector index fell 1.4% and followed the decline in crude oil prices due to expectations of increased supply after OPEC’s major oil-producing countries reached a compromise agreement.
Data show that the number of Americans who applied for new unemployment benefits last week fell to the lowest point in 16 months, while worker shortages and supply chain bottlenecks hindered companies’ efforts to increase production to meet strong demand for goods and services.
Federal Reserve Chairman Jerome Powell told lawmakers that he expects shortages and high inflation to abate. However, many investors still worry that more sustained inflation may lead to monetary policy tightening earlier than expected.
“People are very nervous and worried about inflation, tax rates, and the (mid-2022) elections. People are very concerned about these three things,” said Andrew Mies, 6 Meridian’s chief investment officer, in describing a recent phone call with corporate clients.
Standard & Poor’s hit a record high, the number of people applying for unemployment benefits: https://tmsnrt.rs/3hFZMNC
The index rose 0.15% to 34,987.02 points, while the S&P 500 index fell 0.33% to 4,360.03.
It fell 0.7% to 14,543.13.
Morgan Stanley (New York Stock Exchange ticker:) After quarterly profits exceeded expectations, it closed up 0.2%. Although the trading boom that supported recent quarterly performance has slowed, it was still boosted by record investment banking activity.
The second quarter reporting season kicked off this week. The four major U.S. banks- FuGuo bank (NYSE code:) & Co, Bank of America Corporation (NYSE code:), Citigroup Inc (NYSE:) and JP Morgan Chase (NYSE:)-total profits of $33 billion, but also highlight the industry’s sensitivity to low interest rates.
According to Refinitiv’s IBES estimates, analysts on average expect the earnings per share of S&P 500 companies to increase by 66%.
So far this year, the S&P 500 index has risen about 16%, and investors will look for companies that can provide strong forecasts to justify their overvaluation.
“Investors will definitely start paying attention to estimates for 2022,” Mies said. “I think you can see that the stock market is basically at its current level in six months.”
The Blackstone Group (NYSE:) said on Wednesday night that it will pay US$2.2 billion to acquire a 9.9% stake in the life and retirement business of American International Group (NYSE:). AIG and Blackstone both rose more than 3%.
After Johnson & Johnson (NYSE:) detected carcinogenic chemicals in some samples, its stock price fell 1.2% after the United States voluntarily recalled five aerosol sunscreen products.
The ratio of falling shares to rising shares on the New York Stock Exchange is 1.65:1; on the Nasdaq, the ratio of 1.58:1 favors the decliners.
The Standard & Poor’s 500 Index hit 30 52-week highs and no new lows; the Nasdaq Composite Index hit 29 new highs and 178 new lows.
The trading volume on the US exchange was 9.6 billion shares, while the average trading volume for the entire trading day in the past 20 trading days was 10.4 billion shares.