Wall Street is again in the zigzag mode. While GM is causing a stir among investors, financial stocks are depressing sentiment. At the end of the trading day, the indices closed inconsistently.
Poor economic data and price losses in financial stocks dampened the buying mood on Wall Street on Wednesday. The New York stock exchanges closed inconsistently. In late trading, stock marketers also sold financial stocks after disappointing job market data. High-tech stocks, however, kept the Nasdaq up. The default value index Dow Jones closed 0.9 percent lower to 23,664 points. The Nasdaq composite however, 0.5 percent advanced to 8,854 positions. The broad one S&P 500 lost 0.7 percent to 2848 points. Also the Dax closed with losses.
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The consequences of the restrictions to curb the coronavirus pandemic for the US labor market are devastating: According to the private employment agency ADP, a good 20 million jobs were lost in April. The previous record from the financial crisis year 2009 was 835,000 job cuts. “We knew it was going to be bad,” said Scott Brown, chief economist for wealth adviser Raymond James. The numbers coincided with the development of initial applications for unemployment benefits in the past weeks. The markets now focused on a potential economic recovery. The big question, however, was whether the coronavirus restrictions would be relaxed too quickly.
GM on the upswing
One of the favorites on the stock market General Motors with a course increase of almost three percent. The financial burden on the carmaker from the production shutdown is less than feared, judged analyst Philippe Houchois of the investment bank Jefferies. In addition, the 8.5 percent profit margin in the North American business is impressive.
The papers from were also in demand Activision Blizzard, which rose by 6.3 percent. The exit restrictions increased demand for the company’s video games such as “Call of Duty” and “Candy Crush”. The company therefore raised its sales target for 2020. The prospect of profit is significantly more than expected, said a stock exchange operator. The quarterly results of the rival Electronic Arts are positive overall, but the outlook is disappointing. The shares of the maker of “Fifa20” and “Need for Speed” lost 3.6 percent.
The titles of Mattel 1.3 percent slipped. The toy manufacturer’s sales have dropped surprisingly sharply, criticized analyst Jaime Katz from the research house Morningstar. Business with the flagship product Barbie dolls in particular is disappointing.
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