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Wall Street indexes ended their three-day winning streak

Wall Street indexes ended their three-day winning streak after evaporating hopes for a trade deal between the US and China.

Wall Street indexes

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The US markets ended the session on Thursday on the red territory as hopes for a trade deal between China and the United States are evaporating. The blue-chip index Dow Jones Industrial Average dropped by 27.59 points to 25,338.84 points, ending its three-day winning streak. The broader S&P 500 wiped out 0.2% of its value to 2,737.83 points and ended in red territory for the first time in four days. The technology index Nasdaq Composite ended the session with a fall of 0.25% to a level of 7,273.08 points.

SP500 index

The South China Morning Post reported that White House advisor Peter Navarro will attend a dinner between the US President Donald Trump and his Chinese counterpart, Xi Jinping, in Buenos Aires, during the G20 summit. After the news, the US indexes reached their lowest level for the day and for a short time the Dow Jones lost more than 160 points.

The news of Navarro’s presence has spared the hopes that a trade deal can be reached during dinner, given his sharp stance on US-Chinese trade relations.

The US has imposed tariffs on Chinese imports worth billions of dollars. China replied with its own charges on US goods. The ongoing dispute has a serious impact on financial markets, corporate earnings and the economy.

The major indexes rose after the resume from the last Fed meeting, which signs that the key interest rate may be “close to its neutral level”. This is probably a sign that fewer interest rates hikes are coming. The publication of the meeting minutes came after Federal Reserve Chairman Jerome Powell said the central bank’s key interest rate was close to neutral. This is a retreat from his comments in recent months.

On the bond markets, the yields on 10-year and 30-year US Treasuries fell to 3.332% and 3.324%, respectively.

On the currency markets, the dollar index, which measures the value of US dollars against a basket of six major currencies, declined by 0.02% to 96.76 points.

On the commodity markets, the crude oil price changed its trends and climbed 3% on Thursday after industry sources reported that Russia had accepted the need to reduce yields together with the OPEC before the group meeting next week.

The futures on US light crude WTI added 1.16 USD to its value to a level of 51.45 USD per barrel. The futures on Brent oil rose by 0.75 USD to 59.51 USD per barrel.

At the same time, US futures on gold remained almost unchanged at 1,224.10 USD per ounce.

Corporate performance

The stocks of aircraft manufacturer Boeing broke their negative trend and climbed 2.7% after the financial services analyzer Cowen identified them as the number one in the aerospace industry in 2019, noting that “a serious slowdown in the economy would be needed to break the current favorable outlook for production”.

The stocks of the semiconductor design company Ambarella rose by 11.7% aftermarket after encouraging outlook of the management during the presentation of the Q3 finance report, despite the revenue decline of 36% YoY.

Palo Alto Networks shares are up by 2% after the quarterly financial statement reports earnings per share of 1.17 USD and revenue of 656 million USD, representing an increase of 31% YoY.

Corporate reports

The cloud computing and platform virtualization software provider VMware, which is subsidiary of Dell Technologies, topped revenue expectations on broad measures and beat operating margin and profit expectations with its third-quarter earnings, and raised its full-year guidance. The company revenues grew 14% overall and net income fell on a GAAP basis to 334 million USD from 395 million USD, including a loss of 161 million USD on its investment in Pivotal Software. VMware’s operating income rose by 17% to 741 million USD.

Dell Technologies announces its third-quarter results. For the third quarter, revenue was 22.5 billion USD, up by 15%, and non-GAAP revenue was 22.7 billion USD, up by 14%. During the quarter, the company generated a GAAP operating loss of 356 million USD, with a non-GAAP operating income of 2.1 billion USD, down by 2%. The company’s cash flow from operations amounted to 833 million USD.

HP Inc reported quarterly revenue growth of 11% YoY, which that beat top-line estimates, but came in-line on earning per share. Personal Systems Group stayed above revenue estimates across the units with total revenue at 10.06 billion USD.

Printing fell short with Supplies bringing 3.39 billion USD, while Commercial Hardware reported revenues of 1.25 billion USD. The Consumer Hardware outperformed analysts expectations with revenue of 667 million USD compared to the estimate of 646.5 million USD.