Frankfort, New York Unanswered questions about US monetary policy unsettle investors on Wall Street. The US standard value index Dow Jones closed on Thursday with little change at 34,160 points. The technology-heavy Nasdaq fell 1.4 percent to 13,352 points. The broad S&P 500 lost 0.5 percent to 4326 points. Encouraging economic data prevented even larger price losses.
The Fed agreed investors for March on the first of likely several rate hikes. That was generally expected, said Thomas Hayes, manager at wealth manager Great Hill. The big unknown, on the other hand, is the planned reduction in securities holdings. “We don’t know how it will be implemented and what the impact will be.”
At the same time, the renewed decline in initial jobless claims allayed fears of an economic slowdown. The world’s largest economy also grew 5.7 percent in 2021, the strongest since 1984. “The second half of the fourth quarter was dominated by the omicron variant of the coronavirus,” said Mike Loewengart, chief investment strategist at brokerage firm E*Trade. “It is encouraging that the economy is meeting this challenge so easily.”
Dollar and oil prices pick up again
The dollar index, which tracks rates against major currencies, was boosted by prospects of US monetary tightening. At times it rose to a one and a half year high of 97.299 points. At the same time, the situation on the bond market eased. Investors turned to US bonds again, pushing yields on the benchmark 10-year Treasury to 1.785 percent.
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On the other hand, some investors cashed in on the crude oil market and pushed down the price of the US grade WTI by 0.7 percent. At $86.80 a barrel (159 liters), however, it stayed within touching distance of its most recent seven-and-a-half-year high. The reason for this is the ongoing tension between Russia and Ukraine, said Commerzbank analyst Carsten Fritsch. “There is still concern that a military escalation could disrupt Russian oil and gas supplies.” Against this backdrop, shares in oil companies such as Exxon and Chevron gained up to two percent.
Look at other individual values
Comcast: The parent company of NBCUniversal and CNBC posted adjusted earnings of 77 cents a share in the fourth quarter, four cents above estimates. Sales were also above analyst forecasts. Comcast also announced an 8 percent dividend increase and increased its share buyback program to $10 billion. The stock initially gains 0.7 percent, but eventually closes 0.9 percent down.
MC Donalds: The stock fell 0.4 percent because the company the estimates for the fourth quarter for both sales and earnings were missed. The restaurant operator missed consensus estimates by 11 cents with adjusted quarterly earnings of $2.23 per share on higher spending.
Netflix: When it came to technology stocks, Netflix was one of the favorites, with a price increase of almost ten percent at times. This is the biggest price jump in a year. At the end of trading, it was still enough for a premium of 7.5 percent. In a letter to clients, billionaire William Ackman’s hedge fund Pershing Square said it had taken advantage of the online video store’s recent price falls to buy nearly $1 billion in shares. Pershing is now Netflix’s largest shareholder with a 20 percent stake. In the past few days, the papers had fallen by around 30 percent at times due to a gloomy outlook.
Tesla: The automaker reported adjusted quarterly earnings of $2.54 per share, up 18 cents from estimates. Sales also exceeded forecasts. Tesla said it would not launch any new models — including the Cybertruck — this year as the company prioritized deliveries due to ongoing supply chain issues. Tesla shares fell more than 11 percent.
intel: The company beat estimates by 18 cents with adjusted quarterly earnings of $1.09 per share. Overall profit was down year-on-year as the chipmaker increased spending on new manufacturing equipment and products. The stock fell about 7 percent.
Levi Strauss: Levi Strauss shares climbed 8.4 percent. The jeans manufacturer is targeting sales of $6.4 billion to $6.5 billion and earnings of $1.50 to $1.56 per share in 2022.
Seagate Technologies: Shares soared 20 percent at the start of trading after the hard drive maker issued upbeat guidance and raised its long-term profit margin target. At the end of the trading day, the shares were up more than seven percent.
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