4/19/2024

Traders weigh in on quarterly reports and data

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Key points:

  • American stock indices closed on April 18 with minor changes.
  • Investors were cautious about quarterly reports, macroeconomic data and comments from the Fed.
  • Netflix shares fell 4% after the release of its quarterly report, despite positive results.

On April 18, American stock indices closed the day with minor changes. Investors cautiously assessed companies’ quarterly reports, as well as macroeconomic data and comments from Fed officials, which indicated continued tight monetary policy in the near term.

The S&P 500 index showed a slight decline of 0.24%, closing at 5,010.19 points. The Nasdaq Composite lost 0.52%, falling to 15,601.02. At the same time, the Dow Jones Industrial Average rose 0.06% to 37,777.18.

Economic data reduces likelihood of rate cuts

The labor market remains stable, with weekly initial jobless claims remaining unchanged from last week, reaching 212,000. Industrial production in the mid-Atlantic region rose to a two-year high.

These factors, along with persistent inflation and statements from Fed officials including Chairman Jerome Powell, have led markets to revise their expectations for the central bank’s action. The Fed was previously forecast to cut interest rates by at least 25 basis points at its June meeting.

However, the current situation is characterized by low unemployment, with 70% of consumer spending in the economy generated by this group of the population. If unemployment remains low, consumers will continue to spend money, travel and use services, which in turn will push incomes and prices higher towards the end of the year.

Netflix shares fall after quarterly report

Netflix shares fell about 4% in extended trading after reporting quarterly results. Although the earnings results were positive, the decline came amid news that the company would stop reporting quarterly subscriber growth for the service.

On the other hand, Meta Platforms shares rose 1.54% to become the top gainer in the S&P 500. The gain came after Bernstein raised its price target for the company’s shares from $535 to $590.

Earnings reporting season is heating up. Genuine Parts shares rose 11.22%, becoming the fastest-growing stock in the S&P index. The auto parts distributor raised its profit forecast for 2024.

At the same time, Las Vegas Sands shares fell 8.66%, becoming the worst performer in the S&P. Even though the company beat quarterly expectations, several brokerages lowered their target price for the stock, citing weakness in its Macau operations.

Equifax shares also fell 8.49% after the ratings company forecast second-quarter revenue below expectations.

Trading volume on US exchanges was 10.54 billion shares, below the average for the last 20 trading days (10.99 billion shares).

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