Mixed Day for US Stocks Amid Earnings Reports – Dollar Rise Continues
Sectors were divided on Thursday as US markets closed after a mixed day. Earnings reports were the key driver which saw tech stocks rally strongly. Industrials on the other hand, slumped after a particularly sticky day for 3M. The company posted its largest one day drop since black Friday of 1987, with a 13% dive. This news did not impact dollar growth, as the currency continued its rise to a new, 4-month high.
Tech Leads the Way
Several tech companies had a very positive day, releasing earnings reports which were well above their forecasted top, and bottom lines. These were led by Facebook, and Microsoft.
Facebook posted impressive figures all round. This includes a particularly strong number in US advertising which came in around 20% higher than experts had anticipated. As well as beating their forecast on the top and bottom, monthly users were also up 2.5% on the last quarter. This means the social media giant now has a total of 2.38 billion monthly users.
The market was less concerned with the $3 billion set aside for legal costs in the FTC inquiry case. Facebook rose 6% on the day.
Microsoft also towed the line in a great day for tech stocks. They posted a mammoth set of Q1 results to beat both their top and bottom line forecasts. The stock was rewarded with a 3% gain.
These results all reflected well on the Nasdaq. Dominated by tech stocks, the index finished the day with gains of 0.21%. This somewhat bucked the trend, as other major indices finished the day with slight downward movements.
Facebook Daily Chart
Job Cuts and Increased Jobless Rate
The announcement of lower than expected earnings from 3M hit the entire industrial sector hard. This meant the Dow also took a hit, closing 0.51% lower. Combined with their disappointing earnings report, 3M announced plans to cut some 2,000 jobs.
This job cut will add to the higher than expected jobless claim rate. Claims came in at 230,000 for the week ended April 20th. This is the largest rise since September 2017, and paints a somewhat bleaker economic picture than we are seeing reflected in the markets at present.
The dollar continued to rise, despite this news, closing the day at 98.145 at levels of strength which are mystifying to many experts who believe a strong change in fortunes for the greenback may be just beyond the horizon.
More Moves Expected
With a smaller number of earnings reports due to end the week, and many more throughout next week, traders should remain on alert for possible index movements in both directions throughout the period.
Friday sees Aon release their earnings report which could give yet another boost to the tech sector. They are forecast to release some strong numbers, and are gaining positively in after hour trading.
Other major releases to complete the week include Exxon and American Airlines, both are anticipating slight gains.