US open: Stocks sharply lower following macro data, tech earnings

dl wall street wall st new york city new york stock exchange nyse dow jones nasdaq street sign nyc united states usa america pb — Sharecast / Alessandro D Andrea via Pixabay

Wall Street stocks were in the red early on Thursday as investors digested disappointing earnings from some of the tech's biggest names.

As of 1530 BST, the Dow Jones Industrial Average was down 1.67% at 37,816.94, while the S&P 500 lost 1.32% to 5,004.57 and the Nasdaq Composite came out the gate 1.64% weaker at 15,455.24.

The Dow opened 643.98 points lower on Thursday, extending losses recorded in the previous session.

On Thursday, Facebook parent company Meta Platforms traded lower in the early trading after the social media giant offered up disappointing Q2 revenue guidance, while IBM fell short of consensus estimates with its first-quarter revenue performance. Honeywell, Chipotle and Merck shares were all in the green shortly after the opening bell on the back of quarterly earnings that beat Wall Street expectations.

Microsoft and Alphabet will deliver earnings after the close.

On the macro front, Americans lined up for unemployment benefits at a decelerated pace in the week ended 20 April, according to the Labor Department, dropping to the lowest level seen since February. Initial unemployment claims fell by 5,000 to 207,000, the lowest in two months and below market expectations for a reading of 214,000, providing more support for the notion of a tight labour market and giving the Federal Reserve more leeway to enact interest rate cuts in order to tackle stubborn inflation. The four-week-moving average, which aims to strip out week-to-week volatility, declined by 1,250 to 213,250, while continuing claims declined by 15,000 to 1.78m.

Elsewhere, US economic activity slowed by more than anticipated at the turn of the year, while price pressures picked up. According to the Department of Commerce, in seasonally adjusted terms, gross domestic product grew at a quarterly annualised pace of 1.6% - down from the 3.4% clip observed over the last three months of the previous year and less than the 2.5% consensus estimate. In terms of prices, Commerce pegged the rate of increase in the core price deflator for personal consumption expenditures at 3.7%, which was up from 2.0% in the preceding quarter.

On another note, US wholesale inventories dropped 0.4% month-on-month in March, according to preliminary estimates from the Census Bureau, defying market expectations of a 0.2% rise and following a downwardly revised 0.4% increase in February. Durables inventories were unchanged, while non-durables stocks decreased 1.1%. On an annualised basis, wholesale inventories were down 2.1% in March.

Moving on, the US trade deficit in goods widened to an advance reading of $91.83bn in March, according to the Census Bureau, the largest in 11 months and up from a revised $90.30bm reading for February and estimates of $91.2bn. Imports declined by 1.7%, while exports fell by a faster 3.5%.

Finally, US pending home sales ticked up 3.4% in March for the first increase since May 2021, according to the National Association of Realtors.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Merck & Co. Inc. (MRK) $130.07 2.42%
Unitedhealth Group Inc. (UNH) $493.30 1.23%
Intel Corp. (INTC) $34.92 1.21%
Coca-Cola Co. (KO) $61.92 0.61%
Walmart Inc. (WMT) $60.08 0.36%
Dowdupont Inc. (DWDP) $0.00 0.00%
Procter & Gamble Co. (PG) $162.44 -0.10%
Apple Inc. (AAPL) $168.84 -0.11%
Chevron Corp. (CVX) $162.90 -0.41%
McDonald's Corp. (MCD) $275.59 -0.42%