Wall Street moves lower at start of busy earnings session

The New York Stock Exchange was in the red on Tuesday despite several announcements of positive results, but the market is mainly waiting for the mecapisations of technology to set the tone after the close.

The Dow Jones index yielded 0.25%, the technology-dominated Nasdaq dropped 0.95%, and the S&P 500 0.73% around 2:30 p.m. GMT.

That President Joe Biden officially announced on Tuesday that he was a candidate for re-election in November 2024 has little influence on the mood of investors for the moment, assured Peter Cardillo of Spartan Capital Securities.

“It’s too early for this to influence ‘traders,’ at the moment the market is focusing on earnings and later this week macro news,” the analyst added to AFP.

Many companies have published their quarterly results since the close Monday evening, “including a lot of good news”, underlined Patrick O’Hare of Briefing.com.

Pepsico, which raised its forecast for 2023 (+2.23%), and the industrial conglomerate 3M (+1.24%), which announced 6,000 new job cuts, saw their shares rise.

McDonald’s yielded 0.87% despite sales having exceeded expectations in the first quarter thanks to the increase in the prices of its menus.

General Motors fell 2.68% although the automaker raised its full-year pretax profit forecast.

On the other hand, its profit in the first quarter fell by 19% to 2.4 billion dollars, remaining above expectations.

“Investors seem to be waiting for more compelling things to bring prices back up,” said Briefing.com’s Patrick O’Hare, referring to big-cap tech releases like those expected on Tuesday after the close, Alphabet, parent company of Google (-0.71% at 2:20 p.m. GMT) and Microsoft (-1.03%).

Meta (Facebook, -1.68%) is to follow on Wednesday evening and Amazon (-2.18%) on Thursday.

Budget airline JetBlue soared nearly 2% after announcing it forecast second-quarter profit on strong travel demand.

The company, which reached an agreement last year to buy Spirit Airlines for 3.8 billion dollars, however suffered a loss of 192 million dollars in the first quarter. This takeover operation is however the subject of a challenge from the Ministry of Justice for reasons of competition.

The title of the regional bank First Republic Bank collapsed by 28% after the announcement the day before of a drop in its deposits in the first quarter. In the wake of the banking crisis which occurred in March and despite the contribution of funds by several large American banks, the Californian bank’s deposits plunged by 41% or 72 billion dollars during the first three months of the year.

“This melting of deposits and the reaction of investors are weighing on the morale” of the stock market, said Mr. O’Hare.

At 2:00 p.m. GMT, the Conference Board also published a further deterioration in US consumer confidence which further clouded the market mood.

Household sentiment fell more sharply than expected in April, particularly under the effect of medium-term confidence and fears of recession.

The general index fell to 101.3 points, against 104 points in March, well below the 104.1 expected by analysts.

“High inflation and rising borrowing costs are selling against consumers,” said Rubeela Farooqi, economist for HFE.

On the bond market, ten-year yields fell to 3.40% against 3.49% the day before.