Wall Street markets ended the trading session on Thursday with limited gains, as the worries about global trade remain.
The blue-chip index Dow Jones Industrial Average added nearly 0.2% to 25,169.88 points. The broader benchmark S&P 500 rose by 0.21% to 2,788.86 points, while technology Nasdaq Composite appreciated by nearly 0.3% to 7,567.72 points.
The markets were shortly into the red territory at the same time as yields on 10-year US Treasury bonds had written off earlier growth rates. At the end of the session, the yields on 10-year US Treasuries reached a level of 2.217%, although it started May at a level of over 2.5%. The returns on 30-year bonds reached a level of 2.643%.
The declining yields, as well as the inversion of the yield curve, raised the concerns about slowing economic growth. Investors generally view the bonds as a safer alternative than more risky assets.
The S&P 500 index dropped by more than 5% this month and remains below the threshold of 2,800 points on Wednesday – a key indicator observed by traders for the first time since the end of March. The S&P 500 could fall even more than it already has in May, according to Stifel’s chief equity strategist Barry Bannister, if the Federal Reserve doesn’t slash interest rates twice.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 3.35% to 17.30.
The prolonged trade dispute between the US and China is also weighing on the markets after a senior Chinese diplomat sparked rhetoric between the two countries and Beijing stopped its purchases of US soybeans. China’s Deputy Foreign Minister said on Thursday that provoking trade disputes is a form of “economic terrorism”.
Meanwhile, the US first-quarter GDP was revised lower to 3.1% on Thursday, a slightly slower pace of growth than the 3.2% annual growth rate the government first estimated, thanks in part to companies spending less money on capital expenditures than initially thought. The nominal GDP growth is moving to 3% from 5% in the first quarter of 2020 and the real GDP estimate is far less than 3%.
Corporate stocks performance
The shares of banks followed the profitability movement. The stocks of Bank of America declined by 2.13%, while those of J.P. Morgan Chase wiped out 1%.
Shares in Dollar General Corporation rose to all-time highs, adding 7.16%, after reporting comparable sales increased by 3.8% in Q1 to top the consensus mark of +2.1%. The retailer says both customer traffic and average transaction amount were higher during the quarter.
The shares in SBA Communications Corp rose also to all-time highs, rising 4.34%, while Total System Services gained 4.02%.
Meanwhile, the shares of Walgreens Boots Alliance fell to 5-year lows, losing 1.13%.
The FAANG stocks are mostly into the green, with Netflix adding 0.7% and Apple adding 0.5%.
The shares of the electric carmaker Tesla are down by 0.9%.
The top performers on the S&P 500 were Dollar General Corporation (+7.16%), SBA Communications Corp (+4.34%) and Total System Services Inc (+4.02%), while on the flip side were PVH Corp (-14.87%), Chesapeake Energy Corporation (-4.67%) and Perrigo Company PLC (-4.58%).
Corporate earnings reports
Dollar General came out with quarterly earnings of 1.48 USD per share, beating the analysts’ estimates of 1.39 USD per share. This compares to earnings of 1.36 USD per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 6.47%. A quarter ago, it was expected that this discount retailer would post earnings of 1.88 USD per share when it actually produced earnings of 1.84 USD, delivering a surprise of -2.13%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Dollar General posted revenues of 6.62 billion USD for the quarter ended in April 2019. This compares to year-ago revenues of 6.11 billion USD. The company has topped consensus revenue estimates four times over the last four quarters.
Chipmaker Marvell Technology Group published earnings for the fiscal first quarter that beat Wall Street’s expectations but gave a cautious outlook. The Marvell earnings news pushed its stock higher in extended trading. The company earned an adjusted 0.16 USD per share on sales of 662 million USD in the quarter ended May 4. Analysts expected Marvell earnings of 0.15 USD per share on sales of 650 million USD. On a year-over-year basis, Marvell earnings fell 50% while sales climbed 10%. For the current quarter, Marvell expects to earn an adjusted 15 cents a share on sales of 650 million USD. That’s based on the midpoint of its guidance. Analysts were expecting Marvell earnings of 0.19 USD per share on sales of 686 million USD. In the year-earlier period, it earned 0.28 USD per share on sales of 665 million USD. Marvell said its fiscal second-quarter guidance factors in the estimated impact from the US.