Story image

While you were sleeping: Wall Street erases earlier gains

14 Apr 2015

Wall Street fell, giving up earlier gains, as investors positioned themselves for the US corporate earnings season.

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.15 percent, the Standard & Poor's 500 Index slid 0.28 percent, while the Nasdaq Composite Index inched 0.06 percent lower. Earlier in the session, the Nasdaq rose above 5,000 for the first time in three weeks.

In the Dow, slides in shares of General Electric and those of Johnson & Johnson, last down 2.6 percent and 1.3 percent respectively, outweighed gains in shares of JPMorgan Chase and those of UnitedHealth, up 0.7 percent and 0.4 percent respectively.

JPMorgan Chase, Wells Fargo, Johnson & Johnson and Intel are among companies reporting earnings in the coming days.

"We had a big move last week and we're heading into earnings season and we've had a few warning signs last week from a couple of companies where the impact of foreign exchange is going to be greater than what was previously thought," Brian Fenske, head of sales trading at ITG in New York, told Reuters

Even so, several stocks bucked the trend. Shares of Netflix rallied, last up 5.6 percent, after UBS analyst Doug Mitchelson upgraded his rating on the stock to buy from neutral, and lifted his stock price target. Netflix is set to report its latest quarterly earnings on Wednesday.

Shares of Apple last traded at US$126.99, down 0.1 percent from the previous close, after earlier in the day rising as high as US$128.57, as analysts estimated preorders of its Apple Watch reached about 1 million after the new product went on sale last Friday.

"Overall we view the trends over the weekend as an indication of solid demand paired with very limited supply, with supply being the most significant limiting factor,"Piper Jaffray analyst Gene Munster said in a note to clients, Reuters reported.

Munster, who forecast Apple will sell 2.3 million watches in the April-June quarter, expects the company to ramp up production between mid-May and June.

There was more reassurance about the US economy and the path of interest rates from Federal Reserve officials. As the US job market improves, the risk is receding that an unexpected setback could derail the recovery once the Fed raises rates, San Francisco Fed President John Williams told Reuters in an interview on Friday, published on Monday.

"As we go through time, that probability of saying 'well, the shocks are going to push us back,' seems to be less, seems to be decreasing," said Williams. "More importantly, we are really thinking about a path, we are talking about moving interest rates from zero to a normal level over several years."

In Europe, the Stoxx 600 Index climbed to a fresh record, finishing the day with a gain of 0.2

percent from the previous close. France's CAC 40 Index rose 0.3. percent.

The European Central Bank's monthly record bond-buying program, begun last month, helps underpin the outlook for euro-zone equities. ECB policy makers next meet on Wednesday, and ECB President Mario Draghi is scheduled to hold a press conference afterward.

"As long as investors have the ECB's QE backstop people will continue to buy the market," Ioan Smith, managing director at trading firm KCG Europe in London, told Bloomberg.

Even so, the UK's FTSE 100 Index fell 0.4 percent, as mining stocks including BHP Billiton declined after a report showing Chinese imports slid underpinned concern about the slowdown in the Chinese economy. Germany's DAX declined 0.3 percent.

Platform9 and Intersect partner to bring unified cloud to A/NZ
“For Intersect, Platform9 represents the single most strategic solution to a set of challenges we see expanding across the board."
Meet the future of women in IT
Emily Sopers has just won Kordia’s first ever Women in Technology Scholarship, which was established to address gender imbalance in the information and communications technology (ICT) sector.
Web design programmers do an about face – again!
Google is aggressively pushing speed in the mobile environment as a critical ranking factor, and many eb design teams struggling to reach 80%+ speed scores on Google speed tests with gorgeous – but heavy - WordPress templates and themes.
Digital spending to hit US$1.2 trillion by 2022
A recent study by Zinnov shows that IoT spend reached US$201 billion in 2018 while outsourcing service providers generated $40 billion in revenue.
'Iwi Algorithm' can grow Aotearoa's mana
Ngāti Whātua Ōrākei innovation officer Te Aroha Grace says AI can help to combine the values from different cultures to help grow Aotearoa’s mana and brand – and AI is not just for commercial gain.
Dropbox brings in-country document hosting to A/NZ & Japan
Dropbox Business users in New Zealand, Australia, and Japan will be able to store their Dropbox files in-country, beginning in the second half of 2019.
Why 'right to repair' legislation could be a new lease on life for broken devices
“These companies are profiting at the expense of our environment and our pocketbooks as we become a throw-away society that discards over 6 million tonnes of electronics every year.”
Kiwis know security is important, but they're not doing much about it
Only 49% of respondents use antivirus software and even fewer – just 19% -  change their passwords regularly.