U.S. Stocks Trade Sideways On Slowdown Worries

Barry Adams
01 Jul, 2022
New York City

Benchmark indexes traded sideways on the first day of the third quarter after logging the worst decline in the first-half in decades. 

The S&P 500 declined 16% in the second quarter ending on Thursday and fell 20.6% in the first-half. The second quarter decline was the worst since the first quarter 2020.

The Nasdaq dropped 22.4% in the second quarter and its worst record since 2008 and plunged 29.4% in the first-half. 

The stock market declined in the quarter and the first-half touched every sector except commodities and energy.  

In Friday's trading, the S&P 500 index increased 0.2% to 3,794.11 and the Nasdaq Composite index traded flat at 11,019.93. 

The popular averages traded near the flat line and digested the latest corporate news and economic data from the U.S., Asia and Europe. 

The Institute of Supply Management said the U.S. manufacturing activity index declined to 53, the lowest since June 2020. 

The new order index dropped to 49.2 from 55.1 in May, showing a contraction for the first time since May 2020. 

The 50-mark separates expansion from contraction. 

General Motors gained 0.9% to $32.04 after the automaker said the company sold 582,401 vehicles in the second quarter, 15% fewer than a year ago. 

The company said supply chain disruptions have held up 95,000 vehicles lacking computer chips and certain components but vehicles are expected to be sold to dealers by the end of 2022.  

The automaker guided net income in the June quarter to be in the range of between $1.6 billion and $1.9 billion and adjusted earnings to be in the range of between $2.3 billion and $2.6 billion. 

Micro Technology declined 2.7% to $53.78 after the chipmaker said revenues in the fiscal 2022 third quarter ending on June 2  rose to $8.6 billion from $7.6 billion a year ago. 

Net income in the quarter rose to $2.6 billion or $2.34 a share from $2.3 billion or $2.0 a share. 

The chipmaker's fourth quarter guidance was substantially weaker than anticipated by analysts. 

The company expects fourth quarter revenues of $7.2 billion with a band of $400 million and diluted earnings per share of $1.52 with a 20 cents band. 

Kohl's Corporation plunged 17.3% to $29.57 after the department store retailer ended its talks to sell its business and cited deteriorating retail environment in the last six months. 

The retailer also said second quarter sales are likely to fall in high-single digits compared to the previous estimate of a decline in low-single digits and said "the company is seeing a softening in consumer spending."

 

Inflation In Europe Accelerates 

The inflation in the euro zone accelerated to 8.6% in June from 8.1% in May according to the preliminary estimate released by the eurostat Friday. 

Italian consumer prices rose at 8.0% in June after rising at 6.8% in May, a  separate report from the Italian statistics office Istat showed Friday. 

The manufacturing Purchasing Managers' Index fell to a 22-month low of 52.1 in June from 54.6 in May, final data from S&P Global showed Friday.

The preliminary estimate was 52.0, any data above 50 indicates expansion. 

The U.K. manufacturing activities rose at the weakest pace in nearly two years on weaker new orders and production and the overall index declined for the fifth month in a row.  

The Chartered Institute of Procurement & Supply 's final Purchasing Managers' Index dropped to a two-year low of 52.8 in June from 54.6 in May.