NEW YORK, April 14 ― US stocks fell in subdued trading yesterday after a strong rally last week, as US companies prepared to kick off a widely expected painful quarterly earnings season due to the coronavirus pandemic.
The S&P banking subsector shed 4 per cent with JPMorgan Chase & Co and Wells Fargo & Co set to report yesterday and analysts expecting a bleak outlook for the year.
Earnings for S&P 500 firms are expected to tumble 10.2 per cent in the first quarter, compared with a January 1 forecast of a 6.3 per cent rise, before plummeting 22.4 per cent in the second quarter as sweeping lockdowns halt business activity and spark furloughs.
A staggering 16 million Americans have filed for jobless claims in the three weeks to April 4 and economists expect US unemployment spiking to Depression-era levels in coming weeks as entire sectors shut down to try to contain the pandemic.
Helping to limit losses, Amazon.com Inc gained 5.3 per cent as the retail giant said it would hire 75,000 more people amid a surge in demand for online orders.
Volume was lighter than usual with European and other markets still closed following Easter Sunday, but investors “also are facing another phase for the market, and that is the earnings season,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
About 16 million Americans have filed for jobless claims in the three weeks to April 4 and economists expect US unemployment spiking to Depression-era levels in coming weeks as entire sectors shut down to try to contain the pandemic.
The Dow Jones Industrial Average fell 432.27 points, or 1.82 per cent, to 23,287.1, the S&P 500 lost 42.25 points, or 1.51 per cent, to 2,747.57 and the Nasdaq Composite dropped 23.59 points, or 0.29 per cent, to 8,129.99.
The small-cap Russell 2000 index fell 3.5 per cent.
The S&P 500 has recovered about 24 per cent since hitting a three-year low in March, powered by aggressive US monetary and fiscal stimulus and early signs of a potential peaking in US coronavirus cases, but remains about 19 per cent below its mid-February record high.
New York Governor Andrew Cuomo said yesterday he believed “the worst is over” as hospitalizations appeared to be reaching a plateau in the worst-hit US state, adding that he would announce a coordinated plan on reopening businesses.
Carnival Corp, Royal Caribbean Cruises and Norwegian Cruise Line Holdings tumbled as the US Centers for Disease Control and Prevention extended its “no sail order” for all cruise ships.
Ford Motor Co shed 5.1 per cent after the carmaker projected quarterly adjusted loss before interest and taxes to be about US$600 million (RM2.59 billion), compared with a profit of US$2.4 billion a year earlier.
Caterpillar Inc tumbled 8.7 per cent after Bank of America Global Research downgraded the heavy equipment maker to “underperform”.
Declining issues outnumbered advancing ones on the NYSE by a 3.28-to-1 ratio; on Nasdaq, a 2.05-to-1 ratio favoured decliners.
The S&P 500 posted three new 52-week highs and no new lows; the Nasdaq Composite recorded 13 new highs and 13 new lows. ― Reuters
