(New York) The New York Stock Exchange, which had started the first session of the month in the green, fell on Thursday following American indicators which raised concerns about the prospects of the world’s largest economy.
The Dow Jones Industrial Average fell 1.21% to 40,347.97, its worst session since May, the tech-dominated NASDAQ fell 2.30% to 17,194.14 and the S&P 500 fell 1.37% to 5,446.68.
U.S. manufacturing activity fell for a fourth straight month in July and deteriorated further, still hurt by high interest rates that are weighing on consumption and investment, according to data from the ISM trade association.
The index measuring this activity fell to 46.8%, down 1.7 percentage points from June, again below the 50% mark which signals a contraction in activity.
This is less than expected by analysts, who were counting on a less severe contraction than in June, and saw the index rise to 48.9%, according to the MarketWatch consensus.
As for weekly jobless claims, also released Thursday, they rose to a nearly one-year high of 249,000 last week, more than expected.
“The macroeconomic news has scared the market, especially the ISM which has contracted,” noted Peter Cardillo of Spartan Capital.
“The market is starting to fear that the economy will slow to the point of causing a recession within eight to 12 months,” the analyst added.
Bond yields fell below 4% for ten-year bonds for the first time since February, to 3.96%.
“Usually, falling bond yields are positive for the stock market, but this time the market is looking at it differently,” Cardillo said.
“Investors are wondering whether the economy is slowing too much,” he added.
The day before, the American markets had experienced a day of rebound in the wake of a meeting of the Fed which did not rule out lowering its rates in September on Wednesday.
On Friday, just before the stock market opens, the Labor Department will release U.S. employment figures for July. Hiring is expected to decline to 185,000, from 206,000 in June, according to MarketWatch forecasts.
On the stock market, Meta, which temporarily soared by more than 9% during the session following brilliant results, closed up 4.82% at $487.74.
The profit of the group that oversees Facebook, Instagram and WhatsApp climbed by 73% over a year, to 13.5 billion dollars, in the second quarter on a turnover of 39 billion (+22%), higher than its own expectations and those of the market.
Amazon ended down 1.56% just before announcing, admittedly, a doubling of its profits but with a turnover that was disappointing in the eyes of analysts.
Shares of the online retail and cloud computing giant fell 4% in after-hours trading.
Apple closed down 1.68% as it awaited its results. Tesla plunged 6.55% to $216.86.
The bottom performer was vaccine maker Moderna, which fell 21.01%. The company sharply cut its sales outlook for 2024 due to lower demand for COVID-19 vaccines in Europe.
Intel, which closed down 5.50%, was down another 14% in after-hours trading. The company announced a suspension of its dividend distribution as it expects third-quarter revenue to fall short of expectations.
The microprocessor maker also plans to cut its workforce by 15%.
Boeing, for its part, fell 6.45% to $178.31.
Core stocks such as soda giant Coca-Cola (+1.83%) and household and hygiene products group Procter and Gamble (+3.07%) performed well.
In the discretionary spending sector, home furnishings site Wayfair declined 8.12% as the company reported a second-quarter loss of $42 million and also warned of consumer “caution.”
TSX drops nearly 400 points
Canada’s main stock index erased its gains from the previous day on Thursday, falling 1.7%, with most major sectors down, while U.S. markets also fell.
The S&P/TSX composite index closed down 387.60 points at 22,723.21.
The Canadian dollar was trading at 72.22 cents US, down from 72.42 cents US on Wednesday.
On the New York Commodity Exchange, crude oil fell by US$1.60 to US$76.31 per barrel, and natural gas fell by seven cents to US$1.97 per million BTU.
The gold contract rose $7.80 to $2,480.80 an ounce and the copper contract fell nine cents to $4.08 a pound.
The Canadian Press