© Reuters. WALL STREET ENDS DOWN
by Sruthi Shankar and Sinéad Carew
NEW YORK (Reuters) – Wall Street ended lower in the last session of the week, driven by the values high tech, who have demoted in the wake of Apple (NASDAQ:AAPL), while a rise in bond yields has also started to give investors a few chills.
Apple stock has lost 4.1 per cent, a second consecutive decline, due to a note from Morgan Stanley (NYSE:MS), which predicted a quarterly profit slightly below expectations and believes that the consensus for the second quarter should be revised downward.
The group at the apple has driven the entire compartment high tech index gave 1.51 per cent, and the Nasdaq Composite index, which blames the loss of the higher of the three major indices.
“There is that which is unique to Apple, but also can be a little bit of nervousness in the waiting of the publications of the accounts of companies,” said Daniel Morgan, Synovus Trust).
Alphabet, Facebook (NASDAQ:FB), Intel (NASDAQ:INTC) and Microsoft (NASDAQ:MSFT), among others, will publish their results next week.
Apple had already left 2.8% Thursday after a warning of Taiwan Semiconductor (TSMC), the first sub-contractor to the global semiconductor, which has revised downward its forecast of the market this year due to a weakening of demand for smartphones.
The Dow Jones has lost 201,95 points (0.82 percent) to 24.462,94 points. The S&P-500 has yielded 22,99 points (0.85 per cent) to 2.670,14 points. The Nasdaq Composite dropped 91,93 points, or 1.27 per cent, to 7.146,13 points.
Throughout the week, the three indices, however, are on the rise, of 0.4% for the Dow, 0.5% for the S&P and 0.6% for the Nasdaq.
The Dow Jones has, however, received the support of General Electric (NYSE:GE) (+3,93%), which has more than tripled its earnings in the first quarter thanks to the good performance of the divisions aviation and health.
Analysts expect the profits of the companies in the first quarter of 2018 are up 20%, a percentage not seen since the fourth quarter of 2010, the period or the percentage was 37%.
Out of the 87 companies that have already published their accounts, 79,3% exceeded the consensus, according to Thomson Reuters I/B/E/S, which is more than the percentage of 75% in average of the four previous quarters, a consequence, among other things, the tax reform american which proves to be very interesting for companies.
For revenue, analysts project an increase of 7.5% over the first quarter and 71.3% of the companies who have already released their beat the consensus. The average percentage of the past four quarters was 69%.
“The results are good, beyond expectations which were already high,” said Brent schutte (Northwestern Mutual Wealth Management). However, he added, rising interest rates will weaken the Stock and cause corrections in the short term. “But the effect will be smaller if the growth continues and leads behind it the Stock market”.
The yield of the benchmark bond to 10 years of age reached its highest in nearly a month, the bond market had suffered clearances for the second day in a row, causing a steepening of the yield curve, which had been flatten for two weeks.
“It slowly gets nearer to 3% and therefore, from a technical point of view, the 10 years will start to draw the attention of the people”, said Ryan Larson (RBC Global Asset Management).
When yields are high, investors tend to focus on the obligations at the expense of defensive sectors such as CONSTRUCTION or consumer goods of first necessity, synonymous with high dividend-price growth is slow and predictable.
In fact, the sectoral index of primary goods has let go of 1.68%, the highest loss of the session, before the index of the high techs.
On the contrary, the banking sector enjoys such a context; the banking index KBW has gained 0.21 per cent and the S&P financial is the only one of the 11 major sectoral indices to not end up in the red, pulling out a 0.05% gain.