Market Update
June Producer Price Index Soars 11.3%
Brian Turner
14 Jul, 2022
New York City
The producer price index soared 11.3% in June from a year ago and increased 1.1% on a monthly basis, the Bureau of Labor Statistics reported Thursday.
On a monthly basis producer price index increased 0.9% in May and jumped 0.4% in April.
Core producer price index, excluding food and energy, rose 6.4% in June.
The index for final demand goods moved up 2.4% in June, the sixth monthly increase in a row.
Nearly 90% of the June increase can be traced to a 10.0-percent jump in prices for final demand energy.
The indexes for final demand goods less foods and energy and for final demand foods advanced 0.5% and 0.1%, respectively.
European Markets Drop 2%, Eurozone Growth Estimate Lowered
Bridgette Randall
14 Jul, 2022
New York City
European markets extended losses on the worries of faster increase in interest rates and mixed earnings reports.
The DAX index declined 1.9% to 12,509.64, the CAC-40 index fell 1.6% to 5,902.25, and the FTSE index dropped 1.96% to 7,015.10.
The euro extended its losses to a low last seen since 2002 of $0.99.
Benchmark indexes dropped on the worries of rising inflation after the U.S. wholesale prices rose 11.3% stoking the fears of faster rate increases.
The eurozone economic growth in 2022 was lowered to 2.6% from the previous estimate of 2.7% released three months ago, the European Commission said in its summer report on Thursday.
The commission downgraded the outlook citing the surging inflation, ongoing China coronavirus challenges, and continued war in Ukraine.
The estimate of the economic growth in 2023 was also lowered to 1.4% from the Spring estimate of 2.3%.
Germany's growth outlook was lowered to 1.4% and 1.3% and France's estimate was lowered to 2.4% and 1.4% in 2022 and 2023 respectively.
However, Spain's economy is expected to expand 4.0% in 2022 and 2.1% in 1.4% in 2023 and Italy's economy is set to grow 2.9% and 0.9% respectively.
Ericsson dropped 9.2% to skr 71.88 after the telecom equipment maker said revenues in the June quarter rose 14% to skr 62.5 billion from skr 54.9 billion.
Net income rose 19% to skr 4.7 billion or skr 1.35 per share from skr 3.9 billion or skr 1.10 a share a year ago.
Free cash flow in the quarter increased to skr 4.4 billion from skr 4.1 billion a year ago.
Experian Plc gained 2.8% to 2,647.05 pence after the British credit reporting service reported revenues in the latest quarter increased 7% and jumped 9% on a constant currency basis.
Hugo Boss gained 2.5% to 55.80 euros after the high-end men's fashion company lifted its financial year outlook.
full-year sales are expected to increase between 3.3 billion and 3.5 billion euros and operating earnings between 285 million and 310 million euros.
Sales in the second quarter rose 29% to 878 million euros and jumped 34% when adjusted for currencies and operating earnings of 100 million euros.
S&P 500 Trim Losses Despite Inflation Surge
Barry Adams
13 Jul, 2022
New York City
Stocks sank after inflation accelerated to a new 4-decade high but managed to rebound and trim day's losses.
The consumer price increase intensified to 9.1% annual rate in June from 8.6% in May after gasoline prices surged 60% from a year ago.
The S&P 500 index dropped 1.0% to 3,781.62 and the Nasdaq Composite index declined 1.3% to 11,122.30.
Futures of crude oil prices edged up a fraction $96.40 a barrel and natural gas gained 46 cents to $6.63 a unit.
The yield on 10-year Treasury notes jumped to 3.01% and backed down to 2.91% but the 2-year yield jumped to 3.13% after the release of the latest inflation report.
The gap between 2-year and 10-year is the largest since 2000 and many investors believe that the inverted yield generally forecasts impending economic recession.
Benchmark indexes opened lower on the worries that the latest inflation report will provide another reason for the Federal Reserve to lift interest rate by a large 75 basis points at its next meeting on July 26-27.
Core inflation, which excludes volatile food and energy, rose 5.9% on an annual basis after rising at 6.0% in April.
Despite the sharp rise in inflation, market indexes turned around after two hours of trading and touched the flat line but struggled to stay in the positive territory.
Delta Airlines declined 6.3% on the market weakness and the company reported profit despite the rising fuel costs as summer travel picked up and business travel began to accelerate.
June quarter revenues rose 10% to $13.8 billion and net income fell 49% to $735 million or $1.15 a share from $1.44 billion or $2.21 a share a year ago.
The airline said June quarter domestic revenues were 3% higher and international revenues were 81% of the period in 2019.
Alphabet, the parent of Google search engine, declined 2.2% and announced a hiring slow down for the rest of the year on the economic uncertainties.
Netflix gained 1.6% to $177.26 after the streaming services provider struck a partnership with Microsoft for its ad-supported service.
Unity Software dropped 17.3% to $32.85 and Ironsource Ltd. soared 47.9% to $3.30 after two companies agreed to merge in a $4.4 billion all-stock transaction.
Separately, Unity lowered its full-year outlook.
European Markets Sank Deeper
European markets declined further after the release of the inflation report.
The DAX index declined 1.1% to 12,756.32, the CAC-40 index fell 0.7% to 6,000.24, and the FTSE 100 index decreased 0.7% to 7,156.37.
Eurozone production increased 0.8% and 0.6% in the European Union in May on a monthly basis, the eurostat reported on Wednesday.
On an annual basis, industrial production increased 1.6% in the euro area and 2.7% in the EU in May.
The U.K. GDP increased 0.5% in May from the revised decline of 0.2% in April, the Office for National Statistics said on Wednesday.
The expansion was broad based driven by increases in services, production, and construction.
The monthly GDP is now estimated to be 1.7% above its pre-coronavirus pandemic levels in February 2020.
On an annual basis, the GDP rose 3.5% in May after rising at 3.7% in April.
The euro inched lower to $1.003.
Movers: Alphabet, Delta, Fastenal, Latham, Qurate, Twitter, Zoom Video
Barry Adams
13 Jul, 2022
New York City
On Wall Street stocks lacked direction after inflation accelerated to a new 4-decade high on the sustained jump in gasoline prices.
The consumer price increase intensified to 9.1% annual rate in June from 8.6% in May after gasoline prices surged 60% from a year ago.
The S&P 500 index was unchanged at 3,820.32 and the Nasdaq Composite index increased 0.3% to 11,302.47.
Futures of crude oil prices edged down a fraction $95.68 a barrel and natural gas gained 32 cents to $6.48 a unit.
The yield on 10-year Treasury notes jumped to 3.01% after the release of the latest inflation report.
Alphabet Inc decreased 1.7% to 2,243.40 after chief executive Sundar Pichai announced the company's plan to slow down hiring amid the economic uncertainty.
"We
Europe Movers: Credit Suisse, Concurrent Technologies, Glencore, J D Wetherspoon, SAS, Tullow
Bridgette Randall
13 Jul, 2022
Frankfurt
European markets dropped after the U.S. inflation accelerated in June.
The DAX index declined 1.3% to 12,742.07, the CAC-40 index fell 1.1% to 5,977.07, and the FTSE 100 index decreased 0.8% to 7,152.80.
The indexes were under pressure from the start but dropped sharply after the release of the U.S. inflation report.
The 4-decade high inflation in the U.S. is expected to support Fed's plan of lifting interest rates at a faster pace of 75 basis points at the next Fed's meeting on July 26-27.
Consumer prices in June accelerated at a 9.1% rate after rising 8.6% in May, the Bureau of Labor Statistics reported on Wednesday.
Core prices, excluding food and energy, rose 5.9% in June after rising at 6.0% in May.
Much of the inflation was driven by a sharp rise in gasoline prices, advancing 11.2% on a monthly basis and nearly 60% from a year ago.
Benchmark indexes in the region recovered in the next two hours of trading from the lows after the release of the U.S. inflation report.
The euro inched lower to $1.003 and the negative sentiment persisted in the currency trading on the expectations of slower economic growth and rising interest rates in the region.
The euro traded at $1.14 at the start of 2022 and has steadily fallen, driven by the deepening energy crisis, Ukraine war, and widening rate gaps between Germany and France and peripheral economies of Italy, Spain, and Greece.
Scandinavia Airlines surged 9.50% to kr 0.67 after the pilot union resumed talks with the embattled airline's management today.
Credit Suisse Group AG declined 3.8% to 5.29 swiss francs and the investment banker said it postponed the initial public offering of its real-estate fund 1a Immo PK because of weak market conditions.
J D Wetherspoon plc dropped 8.3% to 577.50 pence after the pub chain operator said comparable sales declined 0.4% in the June quarter compared to 4% decline in the March quarter from similar periods in 2019.
"Many people predicted a boom in pub sales when lockdowns and restrictions ended, due to pent-up demand, but recovery for many companies has been slower and more laborious than was anticipated.
Although sales now match 2019, labour costs are far higher. The company is, with minor exceptions, fully staffed," the pub operator said in a press release.
Concurrent Technologies jumped 7.2% to 79.89 pence after the company won an order to supply high-end computer boards.
The company "entered into a supply agreement and has received a $2.2 million order for initial product shipments from a global medical technology company based in the USA.
Initial shipments have commenced for qualification purposes with volume shipments scheduled to start at the end of 2022," the advanced embedded boards maker said in a statement to investors today.
Tullow Oil Plc declined 2.8% to 42.62 pence despite the company reaffirming its full-year outlook.
Glencore Plc declined 1.03% to 417.70 pence after the company said it completed the sale of a royalty package by BaseCore Metals LP to Sandstorm Gold Ltd. for $525 million.
BaseCore is equally owned by Glencore and Ontario Teachers
European Markets Trade Down Fighting Slower Growth and Faster Rate Worries
Bridgette Randall
13 Jul, 2022
Frankfurt
European markets dropped after the U.S. inflation accelerated in June.
The DAX index declined 1.3% to 12,742.07, the CAC-40 index fell 1.1% to 5,977.07, and the FTSE 100 index decreased 0.8% to 7,152.80.
The indexes were under pressure from the start but dropped sharply after the release of the U.S. inflation report.
The 4-decade high inflation in the U.S. is expected to support Fed's plan of lifting interest rates at a faster pace of 75 basis points at the next Fed's meeting on July 26-27.
Consumer prices in June accelerated at a 9.1% rate after rising 8.6% in May, the Bureau of Labor Statistics reported on Wednesday.
Core prices, excluding food and energy, rose 5.9% in June after rising at 6.0% in May.
Much of the inflation was driven by a sharp rise in gasoline prices, advancing 11.2% on a monthly basis and nearly 60% from a year ago.
Benchmark indexes in the region recovered in the next two hours of trading from the lows after the release of the U.S. inflation report.
Eurozone Production Rises, UK GDP Expands
Eurozone production increased 0.8% and 0.6% in the European Union in May on a monthly basis, the eurostat reported on Wednesday.
On an annual basis, industrial production increased 1.6% in the euro area and 2.7% in the EU in May.
The U.K. GDP increased 0.5% in May from the revised decline of 0.2% in April, the Office for National Statistics said on Wednesday.
The expansion was broad based driven by increases in services, production, and construction.
The monthly GDP is now estimated to be 1.7% above its pre-coronavirus pandemic levels in February 2020.
On an annual basis, the GDP rose 3.5% in May after rising at 3.7% in April.
Rate Worries Drag Euro to Dollar Parity
The euro inched lower to $1.003 and the negative sentiment persisted in the currency trading on the expectations of slower economic growth and rising interest rates in the region.
The euro traded at $1.14 at the start of 2022 and has steadily fallen, driven by the deepening energy crisis, Ukraine war, and widening rate gaps between Germany and France and peripheral economies of Italy, Spain, and Greece.
Scandinavia Airlines surged 9.50% to kr 0.67 after the pilot union resumed talks with the embattled airline's management today.
Credit Suisse Group AG declined 3.8% to 5.29 swiss francs and the investment banker said it postponed the initial public offering of its real-estate fund 1a Immo PK because of weak market conditions.
J D Wetherspoon plc dropped 8.3% to 577.50 pence after the pub chain operator said comparable sales declined 0.4% in the June quarter compared to 4% decline in the March quarter from similar periods in 2019.
"Many people predicted a boom in pub sales when lockdowns and restrictions ended, due to pent-up demand, but recovery for many companies has been slower and more laborious than was anticipated.
Although sales now match 2019, labour costs are far higher. The company is, with minor exceptions, fully staffed," the pub operator said in a press release.
Concurrent Technologies jumped 7.2% to 79.89 pence after the company won an order to supply high-end computer boards.
The company "entered into a supply agreement and has received a $2.2 million order for initial product shipments from a global medical technology company based in the USA.
Initial shipments have commenced for qualification purposes with volume shipments scheduled to start at the end of 2022," the advanced embedded boards maker said in a statement to investors today.
Tullow Oil Plc declined 2.8% to 42.62 pence despite the company reaffirming its full-year outlook.
Glencore Plc declined 1.03% to 417.70 pence after the company said it completed the sale of a royalty package by BaseCore Metals LP to Sandstorm Gold Ltd. for $525 million.
BaseCore is equally owned by Glencore and Ontario Teachers
Stocks Sink After Inflation Accelerates In June
Barry Adams
13 Jul, 2022
New York City
Stocks sank after inflation accelerated to a new 4-decade high on the sustained jump in gasoline prices.
The consumer price increase intensified to 9.1% annual rate in June from 8.6% in May after gasoline prices surged 60% from a year ago.
The S&P 500 index dropped 1.0% to 3,781.62 and the Nasdaq Composite index declined 1.3% to 11,122.30.
Futures of crude oil prices edged down a fraction $95.68 a barrel and natural gas gained 32 cents to $6.48 a unit.
The yield on 10-year Treasury notes jumped to 3.01% after the release of the latest inflation report.
Benchmark indexes opened lower on the worries that the latest inflation report will provide another reason for the Federal Reserve to lift interest rate by a large 75 basis points at its next meeting on July 26-27.
Core inflation, which excludes volatile food and energy, rose 5.9% on an annual basis after rising at 6.0% in April.
Delta Airlines declined 6.3% to $29.11 after the airline reported June quarter revenues rose 10% to $13.8 billion.
Net income in the quarter fell 49% to $735 million or $1.15 a share from $1.44 billion or $2.21 a share a year ago.
The airline said June quarter domestic revenues were 3% higher and international revenues were 81% of the period in 2019.
European Markets Sank Deeper
European markets declined further after the release of the inflation report.
The DAX index declined 1.3% to 12,742.07, the CAC-40 index fell 1.1% to 5,977.07, and the FTSE 100 index decreased 0.8% to 7,152.80.
Eurozone production increased 0.8% and 0.6% in the European Union in May on a monthly basis, the eurostat reported on Wednesday.
On an annual basis, industrial production increased 1.6% in the euro area and 2.7% in the EU in May.
The U.K. GDP increased 0.5% in May from the revised decline of 0.2% in April, the Office for National Statistics said on Wednesday.
The expansion was broad based driven by increases in services, production, and construction.
The monthly GDP is now estimated to be 1.7% above its pre-coronavirus pandemic levels in February 2020.
On an annual basis, the GDP rose 3.5% in May after rising at 3.7% in April.
The euro inched lower to $1.003.
Consumer Inflation Accelerates In June to a New 4-Decade High
Brian Turner
13 Jul, 2022
New York City
Consumer prices accelerated in June largely driven by higher prices for energy, shelter, and food.
The all-item consumer price index increased 9.1% in June after rising at 8.6% in May, the fastest pace of increase since November 1981, the Bureau of Labor Statistics reported on Wednesday.
The annual increase in inflation has been keenly watched by economists, traders, and investors looking for the clues of when price increases are likely to peak.
On a monthly basis, the consumer price index increased 1.3% in June on a seasonally adjusted basis after rising 1.0%.
Core consumer prices, excluding food and energy, rose 0.7% after increasing 0.6% in the previous two months.
The largest contributors to the price increases were shelter, used cars and trucks, medical care, motor vehicle insurance, and new vehicles.
The prices jumped across the board and food prices soared 10.4%, the fastest pace of price increase since February 1981.
Energy prices rose 41.6% on an annual basis, the largest increase since April 1980.
Gasoline prices continued to surge in the month driving much of the inflation.
Gasoline prices rose 11.2% on a monthly basis and soared 59.9% on an annual basis.
U.S. Stocks Drop Ahead of Inflation Reports and Profit Squeeze Worries
Barry Adams
12 Jul, 2022
New York City
U.S. stocks turned lower in the final hour of trading ahead of inflation report on Wednesday.
June consumer price index report is expected to surpass the 8.6% level reported in May tomorrow and wholesale price inflation report is expected to show an increase of 10% on Thursday.
The surging dollar added to a list of worries as the euro traded at parity with the U.S. currency and the Japanese yen and the British pound traded near two-decade lows.
Emerging market currencies also sank near record lows with surging inflation and rising fuel and food prices.
Investors have been dialing down earnings growth expectations as corporations are squeezed from the rising interest rates, surging fuel prices and rising wage costs. The dollar surge is
The S&P 500 decreased 0.9% to 3,818.80 and the Nasdaq Composite index fell 0.95% to 11,264.73.
Futures of crude oil dropped $8.51 to $95.60 a barrel and natural gas fell 20 cents to $6.22 a unit.
The yield on 10-year Treasury notes declined to 2.95% and stayed below the 3.039% yield for 2-year Treasury notes.
Airlines stocks soared after America Airlines said it expects second quarter revenues to top 2019 levels.
American Airlines surged 9.9% to $14.48, United Airlines added 8.1% to $38.23, and Delta Airlines advanced 6.2% to $31.09.
Delta is scheduled to release earnings on Wednesday.
PepsiCo declined a fraction to $169.75 after the beverages and food products maker reported better than expected revenues and earnings.
Peloton Interactive gained 3.9% to $9.27 after the high-end bicycle maker said it plans to end all its manufacturing activities and outsource its production.
Canoo Inc soared 53.6% to $3.61 after Walmart agreed to buy 4,500 electric battery operated vans from the company with an option to purchase additional 5,500 vehicles.
PriceSmart declined 9.6% to $65.54 after the wholesale club chain's quarterly earnings were affected by supply chain disruptions despite rising sales.
Weak German Business Confidence Drags European Markets
European markets reversed earlier losses and closed up amid the uncertainty linked to the future natural gas supply from Russia.
Russia turned off natural gas flow through Nord Stream 1 pipeline for the previously announced scheduled maintenance for ten days.
However, Germany and other European nations are bracing for an extended shutdown as the Ukraine war shows no signs of abating.
Germany gets about one third of its natural gas from Russia.
The DAX index rose 0.5% to 12,905.48, the CAC-40 gained 0.8% to 6,044.21, and the FTSE 100 index added 0.18% to 7,209.84.
European markets opened lower as the energy crisis deepens in the region and worries of the faster U.S. interest rate hike after the release of inflation data on Wednesday.
U.S. June consumer price inflation is expected to cross 8.6% reported in May stoking the fears of a 75 point rate hike at the next Fed's meeting on July 27.
Business confidence index in Germany plunged more than expected in July, according to the data released by a private research institute.
The ZEW Indicator of Economic Sentiment plunged to -53.8 in July from -28.0 in June, Leibniz Centre for European Economic Research reported on Tuesday.
The indexes rebounded in the late afternoon trading shaking off the worries of the future energy supplies and looked ahead to earnings season kicking off later this week.
AkzoNobel rebounded from the morning loss of 1% to close up 1.5% to 63.52 euros and the Dutch paint company plans to invest 20 million euros in France to improve production at two locations.
Thales SA increased 2.4% to 123.30 euros after the electrical systems developer agreed to acquire Dutch OneWelcome for 100 million euros.
United Utilities Group rose 0.3% to 1,036.50 pence and the British utility company agreed to sell its renewable energy to SDCL Energy Efficiency Income Trust plc for about
European Markets Rebound from Morning Losses
Bridgette Randall
12 Jul, 2022
New York City
European markets reversed earlier losses and closed up amid the uncertainty linked to the future natural gas supply from Russia.
Russia turned off natural gas flow through Nord Stream 1 pipeline for the previously announced scheduled maintenance for ten days.
However, Germany and other European nations are bracing for an extended shutdown as the Ukraine war shows no signs of abating.
Germany gets about one third of its natural gas from Russia.
The DAX index rose 0.5% to 12,905.48, the CAC-40 gained 0.8% to 6,044.21, and the FTSE 100 index added 0.18% to 7,209.84.
European markets opened lower as the energy crisis deepens in the region and worries of the faster U.S. interest rate hike after the release of inflation data on Wednesday.
U.S. June consumer price inflation is expected to cross 8.6% reported in May stoking the fears of a 75 point rate hike at the next Fed's meeting on July 27.
Business confidence index in Germany plunged more than expected in July, according to the data released by a private research institute.
The ZEW Indicator of Economic Sentiment plunged to -53.8 in July from -28.0 in June, Leibniz Centre for European Economic Research reported on Tuesday.
The weak confidence data also reflected in the currency trading and the euro dropped to 0.99 against a dollar briefly before recovering to close at $1.003.
The indexes rebounded in the late afternoon trading shaking off the worries of the future energy supplies and looked ahead to earnings season kicking off later this week.
AkzoNobel rebounded from the morning loss of 1% to close up 1.5% to 63.52 euros and the Dutch paint company plans to invest 20 million euros in France to improve production at two locations.
Thales SA increased 2.4% to 123.30 euros after the electrical systems developer agreed to acquire Dutch OneWelcome for 100 million euros.
United Utilities Group rose 0.3% to 1,036.50 pence and the British utility company agreed to sell its renewable energy to SDCL Energy Efficiency Income Trust plc for about
Asian Markets Ease On Rising Coronavirus Infections In China
Arjun Pandit
12 Jul, 2022
New York City
Asian markets fell across the region on the rising prospects of a recession and the resurgent highly infectious subvariant of coronavirus infections in parts of China.
About 30 million people in China are placed in a lockdown condition as several cities in China including parts of Beijing and Shanghai report a rapid spreading of coronavirus.
The Nikkei index dropped 1.8% to 26,339, the Hang Seng index fell 1.3% to 20,844.74, and the Shanghai index declined 1.0% to 3,281.47.
Stocks in Tokyo declined after a measure of wholesale prices rose for the third month in a row in June.
The Japanese yen edged slightly up to 136.65 against one U.S. dollar.
The Sensex index in Mumbai fell 0.94% to 53,886.61 and rupee dropped to a new low as the dollar surged against worldwide currencies.
PepsiCo Lifted Core Earnings Outlook, Sales Rise 5%
Scott Peters
12 Jul, 2022
New York City
PepsiCo gained a fraction to $171.45 after the beverages and food products maker reported better than expected revenues and earnings.
Revenues in the quarter ending on June 11 rose 5.2% to $22.5 billion and net income declined 41.6% to $1.4 billion from $2.4 billion a year ago.
Diluted earnings per share declined 39% to $1.03 from $1.73 a year ago.
Foreign currency translation impacted revenues negatively 3% and earnings per share 2%.
Guidance and Outlook
The company guided full-year organic revenue to increase 10% from the previous estimate of 8% and core constant currency earnings per share to advance 8%.
Beverage sales in North America declined 1%, Frito-Lay North America sales rose 14%, and Quaker Foods North America surged 17%.
The company reiterated its commitment of returning $7.7 billion to shareholders including $1.5 in share repurchases and $6.2 billion in dividends.
PepsiCo estimates 2-percentage-point foreign exchange translation headwind to impact reported net revenue and core earnings per share growth based on current market consensus rates.
The food products maker guided core earnings per share of $6.63, a 6% increase compared to $6.26 a year ago.
PriceSmart Earnings Down On Higher Markdowns
Scott Peters
12 Jul, 2022
New York City
PriceSmart declined 12% to $64.05 after the wholesale club chain's quarterly earnings were affected by supply chain disruptions despite rising sales.
Sales in the quarter ending in May increased 15% to $1.03 billion and net income declined to $19.3 million from $22.6 million a year ago.
Diluted earnings per share fell to 62 cents from 73 cents a year ago.
The earnings were affected by larger than normal markdowns after the retailer ordered more inventories and customers avoided discretionary items and focused on essential goods.
Movers: Canoo, GAP, PepsiCo, Peloton, PriceSmart, Twitter
Barry Adams
12 Jul, 2022
New York City
U.S. stocks headed lower ahead of inflation reports and bank earnings later in the week.
The surging dollar added to a list of worries as the euro traded at parity with the U.S. currency and the Japanese yen and the British pound traded near two-decade lows.
Emerging market currencies also sank near record lows with surging inflation and rising fuel and food prices.
Investors have been dialing down the expectations of earnings growth on the rising interest rates, surging fuel prices and rising wage costs.
The S&P 500 decreased 0.5% to 3,839.57 and the Nasdaq Composite index rose 4.50 to 11,888.30.
Futures of crude oil dropped $4.58 to $99.51 a barrel and natural gas advanced 58 cents to $6.51 a unit.
The yield on 10-year Treasury notes declined to 2.94% and stayed below the 3.03% yield for 2-year Treasury notes.
PepsiCo gained a fraction to $171.45 after the beverages and food products maker reported better than expected revenues and earnings.
Revenues in the quarter ending on June 11 rose 5.2% to $22.5 billion and net income declined to $1.4 billion from $2.4 billion a year ago.
Diluted earnings per share declined to $1.03 from $1.73 a year ago.
Foreign currency translation impacted revenues negatively 3% and earnings per share 2%.
The company guided full-year organic revenue to increase 10% from the previous estimate of 8% increase and estimated core constant currency earnings per share to increase 8%.
Peloton Interactive gained 4.2% to $9.41 after the high-end bicycle maker said it plans to end all its manufacturing activities and outsource its production.
Canoo Inc soared 75% to $4.51 after Walmart agreed to buy 4,500 electric battery operated vans from the company with an option to purchase additional 5,500 vehicles.
PriceSmart declined 12% to $64.05 after the wholesale club chain's quarterly earnings were affected by supply chain disruptions despite rising sales.
Sales in the quarter ending in May increased 15% to $1.03 billion and net income declined to $19.3 million from $22.6 million a year ago.
Diluted earnings per share fell to 62 cents from 73 cents a year ago.
The earnings were affected by larger than normal markdowns after the retailer ordered more inventories and customers avoided discretionary items and focused on essential goods.
Gap Inc declined 5.1% to $8.30 and the company said Sonia Syngal has resigned from the chief executive post and company board following a brief transition.
Executive chairman Bob Martin will temporary assume the CEO position till the company finds a replacement.
The company also appointed Horacio Barbeito as the new chief executive and president of Old Navy.
Twitter Inc gained 2.6% to $33.48 and the company said in a letter sent to Elon Musk that the merger termination is "invalid and wrongful" and demanded to complete the merger as agreed in the agreement.
Earnings Worries and Strong Dollar Keep S&P 500 and Nasdaq Down
Barry Adams
12 Jul, 2022
New York City
U.S. stocks headed lower ahead of inflation reports and bank earnings later in the week.
The surging dollar added to a list of worries as the euro traded at parity with the U.S. currency and the Japanese yen and the British pound traded near two-decade lows.
Emerging market currencies also sank near record lows with surging inflation and rising fuel and food prices.
Investors have been dialing down the expectations of earnings growth on the rising interest rates, surging fuel prices and rising wage costs.
The S&P 500 decreased 0.5% to 3,839.57 and the Nasdaq Composite index rose 4.50 to 11,888.30.
Futures of crude oil dropped $4.58 to $99.51 a barrel and natural gas advanced 58 cents to $6.51 a unit.
The yield on 10-year Treasury notes declined to 2.94% and stayed below the 3.03% yield for 2-year Treasury notes.
PepsiCo gained a fraction to $171.45 after the beverages and food products maker reported better than expected revenues and earnings.
Peloton Interactive gained 4.2% to $9.41 after the high-end bicycle maker said it plans to end all its manufacturing activities and outsource its production.
Canoo Inc soared 75% to $4.51 after Walmart agreed to buy 4,500 electric battery operated vans from the company with an option to purchase additional 5,500 vehicles.
PriceSmart declined 3% to $69.45 after the wholesale club chain's quarterly earnings were affected by supply chain disruptions despite rising sales.
The Surging Dollar Worries Global Markets
The euro is trading at parity to the U.S. dollar and at a two-decade low with the Ukraine war showing no signs of abating and an energy crisis looming in the region.
The Japanese yen is also at a two-decade low driven by the surging imported prices of energy and rising costs of food.
The seven years long British political chaos and decades of economic underperformance is finally knocking the British pound to the lowest it has been since 1984.
One euro fetched $1.003, the British pound closed at $1.183 just shy of $1.15 seen in October 1984, and one dollar yielded 135.81 yen.
European Markets Down On Energy Supply Disruptions
European markets traded down after Russia shut down Nord Stream 1 natural gas flow for 10 days as previously announced.
However, Germany and other European nations are bracing for an extended shutdown as the Ukraine war shows no signs of abating.
Germany gets about one third of its natural gas from Russia.
The DAX index declined 0.7% to 12,745.78, the CAC-40 fell 0.3% to 5,979.61, and the FTSE 100 index dropped 0.1% to 7,184.74.
Asian Markets Fall On Rising Coronavirus Infections
Asian markets fell across the region on the rising prospects of a recession and the resurgent highly infectious subvariant of coronavirus infections in parts of China.
About 30 million people in China are placed in a lockdown condition as several cities in China including parts of Beijing and Shanghai report a rapid spreading of coronavirus.
The Nikkei index dropped 1.8% to 26,339, the Hang Seng index fell 1.3% to 20,844.74, and the Shanghai index declined 1.0% to 3,281.47.
Stocks in Tokyo declined after a measure of wholesale prices rose for the third month in a row in June.
The Japanese yen edged slightly up to 136.65 against one U.S. dollar.
The Sensex index in Mumbai fell 0.94% to 53,886.61 and rupee dropped to a new low as the dollar surged against worldwide currencies.