American stock indexes, which traded in positive territory for most of trading on Monday, unexpectedly reversed towards the end of the session and ended the day with a fall.
Investors reacted negatively to media reports that Apple Inc. plans to reduce the pace of hiring new employees and increase capex next year in anticipation of an economic downturn. After this news, shares of tech companies went down: Apple fell by 2%, Cisco Systems Inc. – by 1.1%, Microsoft Corp. – by 1%.
„It’s a heavy burden for the market,” said Steve Sosnick, chief strategist at Interactive Broker. „These companies are market leaders. These companies also set the upper wage bar.”
Investors continue to analyze the quarterly reports of banks and financial companies and are trying to link the negative forecasts of experts for the economy with the still relatively positive expectations for corporate profits.
„It seems as if something is wrong: either the economic forecast is wrong, or analysts are too optimistic about the reporting. And it seems that the latter is still true,” said the head of investment strategy development in the markets of Europe, the Middle East and Africa State Street Global Advisors Altaf Kassam.
Goldman Sachs Group shares rose 2.5%. According to the results of the second quarter, although the bank reduced its net profit by 45%, the figure turned out to be better than analysts’ forecasts.
Bank of America Corp. papers. added 0.03% in price. The bank increased revenue in April-June by 6%, but its net profit fell by 33%.
The market value of Boeing Co. fell 0.01%, although the group’s shares were among the top gainers among the Dow Jones Index components during trading on the news that Delta Air Lines ordered 100 737 MAX aircraft. Capitalization of Delta Air Lines increased by 3.5%. Later, the carrier also entered into an agreement with General Electric Co. and Safran SA for the supply of 200 LEAP-1B aircraft engines for these aircraft. Shares of General Electric rose 1.3%.
Papers financial Synchrony Financial increased in price by 0.3% on information that the company’s net profit in the second quarter was higher than expected by experts.
Stock quotes of the brokerage company Charles Schwab Corp. dropped by 1.5%, although the company posted a record second-quarter net income and an adjusted per-share figure that was higher than market forecasts.
The Dow Jones Industrial Average fell 215.65 points (0.69%) by the close of trading to 31,072.61 points.
Shares of more than half of the 30 companies included in the calculation of the index showed a negative trend. Merck & Co. papers were among the fall leaders. Inc. (-2.8%), Johnson & Johnson (-2.2%) and Apple. Growth leaders included shares of Goldman Sachs, Dow Inc. (+2%) and Chevron Corp. (+1.4%).
Standard & Poor’s 500 fell 32.31 points (0.84%) to 3830.85 points.
The Nasdaq Composite fell 92.37 points (0.81%) to 11,360.05 points.