U.S. Stocks Trend Lower On Microsoft Warning and OPEC Output Decision

Barry Adams
02 Jun, 2022
New York City

U.S. stocks opened lower after the recession and rate worries drove the market sentiment and limited action from the OPEC+. 

The S&P 500 index declined 0.25% to 4,091.89 and the Nasdaq Composite index fell 1.1% to 11,952.07. 

The yield on 10-year Treasury notes increased to 2.94%. 

Microsoft fell 3% to $264.57 after the company said revenues and earnings are likely to lower than the previous guidance on the foreign exchange adjustments. 

Diluted earnings per share in the fiscal fourth quarter ending in June is now expected to range between $2.24 and $2.34 from the previous estimate between $2.28 and $2.35. 

Investors also parsed the latest earnings from Chewy, GameStop, Victoria's Secret, and HP Enterprise. 

GameStop Corp soared 4% to $124.32 after the retailer reported first quarter 2022 revenues increased 7.8% to $1.38 billion and net loss increased to $157.9 million from $66.8 million a year ago. 

The company reiterated its commitment to launch NFT wallet in the second quarter and expand its digital assets beyond physical retail stores. 

Victoria's Secret rose 1.6% to $45.60 after the intimate apparel retailer reported fist quarter 2022 sales declined 4.5% to $1.48 billion and net income declined to $80.8 million from $174.03 million a year ago. 

The sales decline was driven by a 19.3% decline in direct or online sales to $420.6 million from $520.9 million a year ago.   

Oil was in focus and fell 2% ahead of the OPEC+ meeting today on the speculation that the alliance of oil producing nations and Russia will increase supply to Europe replacing the banned oil imports from Russia. 

OPEC members agreed to bring forward the additional supply of 648,000 barrels of oil per day from the previous plan of 432,000 bpd over three months to September. 

OPEC members have little spare capacity to boost the output.  

European markets advanced after crude oil futures declined on the hopes that the Middle East nations will lift oil productions and increase supply to Europe after the region's leaders placed a ban on Russian oil. 

The DAX index increased 0.6% to 14,427.07 and the CAC-40 index jumped 1.1% to 6,485.85 

Markets in the U.K. are closed Thursday and Friday to mark the platinum jubilee of Queen Elizabeth II. 

During the 70 years as the head of Commonwealth nations, Elizabeth II rarely promoted the interests of nations other than the U.K., supported the apartheid regime in South Africa, and has consistently rejected the returning of the stolen 105.6 carat Kohinoor diamond placed in the crown of Mother Queen.  

Markets in Asia closed mixed with a downward bias after oil traded lower and investors remained focused on the rising inflation and slowing economies. 

The Nikkei 225 index in Tokyo declined 27,413.88, the Hang Seng Index in Hong Kong fell 1.0% to 21,082.13, and the Sensex index in Mumbai jumped 0.8% to 55,818.11. 

The index in Hong Kong fell after new coronavirus infections were detected in the city.