U.S. Stocks Slump Ahead Of Inflation Data, Salesforce Weighs On Dow
30 Maio 2024 - 5:30PM
IH Market News
After ending Wednesday’s session mostly lower, stock saw further
downside during trading on Thursday. The major averages all
finished the day firmly in negative territory, with the Dow once
again falling to its lowest closing level in almost a month.
The Nasdaq and the S&P 500 fell to new lows for the session
late in the day but regained some ground going into the close.
The Dow (DOWI:DJI) slid 330.06 points or 0.9 percent to
38,11.48, the Nasdaq (NASDAQI:COMP) slumped 183.50 points or 1.1
percent to 16,737.08 and the S&P 500 (SPI:SP500) fell 31.47
points or 0.6 percent to 5,235.48.
A nosedive by shares of Salesforce (NYSE:CRM) weighed on the
Dow, with the cloud-based software company plunging by 19.7 percent
to its lowest closing level in over five months.
Salesforce came under pressure after reporting weaker than
expected fiscal first quarter revenues and providing disappointing
fiscal second quarter guidance.
Concerns about the outlook for interest rates also continued to
weigh on the markets ahead of the release of closely watched
inflation data on Friday.
The Commerce Department is due to release its report on personal
income and spending in the month of April, which includes readings
on inflation said to be preferred by the Federal Reserve.
Economists expect consumer prices to rise by 0.3 percent in
April, matching the increase seen in March, while the annual rate
of consumer price growth is expected to come in unchanged at 2.7
percent.
The data could have a significant impact on the outlook for
interest rates, as Fed officials have repeatedly said they need
“greater confidence” inflation is slowing before they will consider
cutting rates.
On the U.S. economic front, the Labor Department released a
report showing first-time claims for U.S. unemployment benefits
crept modestly higher in the week ended May 25th
The report said initial jobless claims rose to 219,000, an
increase of 3,000 from the previous week’s revised level of
216,000. Economists had expected jobless claims to inch up to
218,000 from the 215,000 originally reported for the previous
week.
Meanwhile, the Commerce Department said gross domestic product
climbed by 1.3 percent in the first quarter compared to the
previously reported 1.6 percent jump.
The downwardly revised increase, which was in line with
economists, compares to the 3.4 percent surge in GDP in the fourth
quarter of 2023.
A separate report released by the National Association of
Realtors showed a sharp pullback by pending home sales in the U.S.
in the month of April.
Sector News
Despite the losses posted by the major averages, telecom stocks
moved sharply higher on the day, resulting in a 2.9 percent spike
by the NYSE Arca North American Telecom Index.
Significant strength was also visible among housing stocks, as
reflected by the 2.0 percent jump by the Philadelphia Housing
Sector Index.
Gold stocks also turned in a strong performance amid a slight
increase by the price of the precious metal, with the NYSE Arca
Gold Bugs Index climbing by 1.6 percent.
Commercial real estate, computer hardware and transportation
stocks also saw notable strength on the day, while Salesforce led
the software sector, resulting in a 4.8 percent plunge by the Dow
Jones U.S. Software Index.
Other Markets
In overseas trading, stock markets across the Asia-Pacific
region moved mostly lower during trading on Thursday. Japan’s
Nikkei 225 Index and Hong Kong’s Hang Seng Index both tumbled by
1.3 percent, while China’s Shanghai Composite Index decreased by
0.6 percent.
Meanwhile, the major European markets moved to the upside on the
day. While the German DAX Index crept up by 0.1 percent, the French
CAC 40 Index and the U.K.’s FTSE 100 Index both climbed by 0.6
percent.
In the bond market, treasuries showed a notable rebound after
moving sharply lower over the two previous sessions. Subsequently,
the yield on the benchmark ten-year note, which moves opposite of
its price, slid 7.0 basis points to 4.554 percent.
Looking Ahead
Reaction to the inflation data and its impact on the outlook for
interest rates is likely to be the main driver of trading on
Friday.
SOURCE: RTTNEWS
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