NEW YORK (awp international) – The US stock exchanges fell again in the middle of the week. Inflation worries surfaced again after a recovery wave spurred by banking and technology stocks rolled through Wall Street the day before. The significantly stronger than expected employment data for September from the private sector helped very little. However, the most important indices reduced their strong initial losses in the course of trading, in some cases significantly, which is probably also due to the current falling oil prices.
The Dow Jones Industrial (DJIA) fell 0.76 percent to 34,053.20 points in early trading on Wednesday. The S&P 500 fell 0.54 percent to 4,322.26 points. For the technology-heavy Nasdaq 100, it fell 0.08 percent to 14,662.92 points. The recovery gains from the previous day have thus partly vanished into thin air.
After months of price rally – especially in the USA – the global stock markets are increasingly in the grip of inflation and economic worries and at the same time suffer from fears that interest rates will soon be raised. The recent sharp rise in oil prices play an important role in this. After they had reached new multi-year highs on this Wednesday too, things have now fallen recently. Following the decision by Opec + not to increase its production volume more than planned despite the global oil shortage, Saudi Arabia reduced oil prices for its most important customers in Asia, Europe and the USA. Oil stocks like those of Chevron, ExxonMobil or ConocoPhillips fell between 1.2 and 2.6 percent.
The fact that the labor market service provider ADP reported an increase in employment of almost 570,000 compared to August, while economists had only expected 430,000 new jobs, did not provide much confidence on Wall Street. Economist Ian Shepherdson from the US bank JPMorgan, for example, spoke of significantly better data than in August, but with a view to the government’s labor market data due on Friday they would not be reliable. In addition, details were missing from which one could deduce why the estimates of economists were so clearly exceeded. “We don’t know whether the overshoot is just model-driven or actually due to stronger employment data from ADP customers,” said Shepherdson.
According to stock market operators, the fact that there has not yet been any news on the subject of the debt ceiling also weighs on investor sentiment. The US Treasury Department had warned that the US could run out of money on October 18. According to US Treasury Secretary Janet Yellen, a default by the US government would lead to a recession, as she said on CNBC the previous day.
On the corporate side, the DJIA focused on the Dow Inc share and fell by 3.9 percent. The chemical company announced profit targets worth billions during its capital market day. At the same time, however, he wants to drive his earnings growth with investments worth billions in more environmentally friendly technologies in the coming years.
The paper of the alcohol manufacturer Constellation Brands fluctuated on the Nyse between gains and losses and recently fell by 0.4 percent. The group disappointed with its second fiscal quarter, but raised its target for earnings per share for 2021/22.
Otherwise moving reclassifications. Goldman Sachs commented negatively on the shares of American Airlines and Jetblue Airways and is now recommending a sell. The papers lost around five percent each. US Steel, also rated “Sell” by Goldman, plummeted by a little more than eight percent./ck/he
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