The main Wall Street indexes ended Thursday trading session with declines amid rising fears about the negative impact of the trade war.
The blue-chip index Dow Jones Industrial Average wiped out 357.98 points, or 1.39%, to 25,418.63 points. The broader S&P 500 dropped by 39.40 points, or 1.38%, to 2,816.87 points. The technology index Nasdaq Composite recorded a decline of 135.62 points, or 1.75%, to 7,615.23 points.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 14.71% to 16.92.
Earlier today, China said the US should correct its “wrong actions” to allow trade talks to continue after Trump’s administration imposed a ban on Huawei that hit the global supply chain and the stocks of technology companies.
Another key topic in the investors’ focus was the recent data for the US economy. The number of jobless claims in the US unexpectedly dropped to a 5-week low, indicating that the labor market remains tightened at historical levels against the backdrop of other mixed signals for the economy.
The applications for unemployment benefits declined by 1,000 to 211,000 in the week ending on May 18. This is below the average estimate of the economists for a level of 215,000. At the same time, the four-week moving average, considered to be a better measure for the labor market as the volatility decreases from week to week, is down to 220,250.
The Commerce Department said new home sales dropped 6.9% to a seasonally adjusted annual rate of 673,000 units last month. That followed March’s sales pace of 723,000 units, which was the highest level since October 2007. April’s decline came after three straight monthly increases. The economists had forecast new home sales, which account for about 10% of housing market sales, would decrease 2.8% to a pace of 675,000 units in April. The sales increased by 7.0% YoY. The median new house price increased 8.8% from a year ago to 342,200 USD in April, the highest level since December 2017.
On the bond markets, the yields on 10-year and 30-year US Treasuries fell to 2.312% and 2.747%, respectively.
Corporate stocks performance
The Japanese conglomerate Panasonic has joined the growing list of companies that suspended businesses with Huawei, the world’s second-largest smartphone maker and the leading manufacturer of telecom equipment. Panasonic has announced that it has stopped supplying components to the Chinese giant.
It happened only a day after the British chip maker ARM said that discontinued its business with Huawei. Huawei uses ARM technology to make processors for its smartphones.
On this background, the stocks of Qualcomm, Xilinx and Micron Technology declined by 2.6%, 2.2% and 3% respectively.
The shares of Apple also fell by 1.6% after UBS lowered its target price for the company to 225 USD per share from 235 USD per share.
L Brands Inc shares rallied 13% after the parent of Victoria’s Secret reported better-than-expected first-quarter earnings and raised its guidance for the year.
Shares of Best Buy Co slumped 4.8% after the big-box retailer reported first-quarter earnings that beat Wall Street forecasts but issued a subdued outlook for the full-year 2019.
The stocks of the medical laboratory and research company Organovo Holdings Inc fell to all-time lows, wiping out 39.46%.
The top performers on the S&P 500 were L Brands Inc (+12.84%), Medtronic PLC (+3.24%) and Target Corporation (+2.37%), while on the flipside were NetApp Inc (-8.11%), Hess Corporation (-7.93%) and Devon Energy Corporation (-7.30%).
Corporate earnings reports
Autodesk earnings came in at 0.45 USD per share, missing estimates by 2 cents. The sales of the company came in at 735.5 million USD, missing estimates. The company’s second-quarter earnings and sales guidance fell in-line with consensus. Subscription revenue increased 67% to 595.8 million USD, just below the 599.6 million USD estimate among analysts. The company said revenue for its Architecture, Engineering and Construction and AutoCAD and AutoCAD LT products both grew 37%. For the full fiscal year, Autodesk is looking for 2.71 USD to 2.90 USD in earnings per share, excluding certain items, on 3.25 billion USD to 3.30 billion USD in revenue.
HP Inc posted revenue of 14.0 billion USD in the second quarter, up 0.2% from the year-earlier quarter, and about in line with Street expectations. The company reported fiscal second-quarter net income of 782 million USD, or 0.51 USD per share, compared with 1.06 billion USD, or 0.64 USD per share, in the year-ago period. Adjusted for items such as acquisition-related charges and tax adjustments, among other things, earnings were 0.53 USD per share.
Best Buy Co reported fiscal first-quarter earnings of 265 million USD. The company said it had a net income of 0.98 USD per share. The earnings, adjusted for amortization costs, came to 1.02 USD per share. The consumer electronics retailer posted revenue of 9.14 billion USD in the period, which met Wall Street forecasts. For the current quarter ending in August, Best Buy expects its per-share earnings to range from 0.95 USD to 1.00 USD.