Major Averages Suffer Weekly, Monthly and Quarterly Losses

Barry Adams
30 Sep, 2022
New York City

Morning doldrums on Wall Street turned sharp and accelerating losses on the final day of the week, the month and the quarter. 

Investors dumped stocks and risk appetite was low after the latest inflation report gave one more reason to continue its campaign of large-sized rate increase. 

The core rate of The personal consumption expenditure price index accelerated in August, denting the market sentiment. 

The yield on 2-year Treasury notes held stable at 4.26%, 10-year Treasury notes edged down to 3.82% and 30-year bonds traded near 3.78%.  

Immediate month delivery futures of crude oil declined $1.63 to $79.63 a barrel and natural gas fell 6 cents to $6.81 a thermal unit. 

 

Major Averages Extend Quarterly Loss Streak 

The S&P 500 index fell 1.5% to 3,585.22 and the Nasdaq Composite index dropped 1.5% to 10,575.62. 

The S&P 500 declined for the third quarter in a row, the streak last seen in 2009 and the Nasdaq Composite for the for the first time since the collapse of dotcom stocks in 2000. 

In the third quarter, the S&P 500 index dropped 5.2% and the Nasdaq Composite declined 4.1%. 

In September, the S&P 500 index declined 9.2% and the Nasdaq Composite plunged 10.4%. 

 For the week, the S&P 500 index fell 2.9% and the Nasdaq Composite index decreased 2.7%.

 

U.S. Stock Movers 

Carnival Corp plunged 20.9% to $7.25 after the cruise line operator reported larger-than-expected loss and slower than expected business recovery after the pandemic. 

Revenues in the third quarter ending in August increased 80% from the second quarter and jumped nearly eight-fold from a year ago to $4.3 billion. 

Net loss in the quarter shrank to $770 million compared to $2.8 billion a year ago and diluted loss per share fell to 65 cents from $2.50 a year ago. 

The company said fourth quarter bookings are lagging pre-pandemic 2019 levels, and at lower daily rates but 2023 advance bookings are "slightly above the historical average and at considerably higher prices, as compared to 2019."

 The cruise operator is also battling with $28 billion of long term debt, with about $9 billion due before the end of 2025. 

Micron Technology, Inc rose 1.8% to $50.91 after the semiconductor chipmaker reported mixed quarterly results and offered an outlook that fell short of expectations.

Revenues in the fourth quarter declined to $6.6 billion from $8.3 billion a year ago.

Net income in the quarter fell to $1.5 billion from $2.7 billion and diluted earnings declined to $1.35 from $2.39 a year ago.

For the fiscal year 2022, revenue jumped to $30.7 billion from $27.7 billion and net income soared to $8.7 billion from $5.8 billion and diluted earnings per share rose to  $7.75 from $8.35 a year ago.  

The company guided fiscal first quarter revenue of $4.25 billion with a band of $250 million and gross margin between 23% and 27%.

The company guided diluted earnings per share between a loss of 9 cents and a profit of 10 cents.

Natuzzi SpA declined 1.7% to $6.21 ahead of the furniture maker releasing its quarterly earnings release after the market closes on Friday.

In the previous quarter ending in March, the company said revenues increased 16.8% to 118.5 million euros.

In the quarter, earnings plunged to 1.3 million euros from 5.9 million euros or diluted earnings per share to 2 euro cents from 11 euro cents a year ago.  

Nike Inc declined 11.1% to $84.80 after the premium athletic shoemaker reported a sharp fall in earnings.

In the latest quarter ending in August, Nike said sales increased 4% to $12.7 billion from $12.2 billion a year ago. Despite the weakness in its third largest market in China and supply chain challenges, sales rose.  

Net income in the fiscal year first quarter plunged 22% to $1.5 billion from $1.87 billion a year ago. Diluted earnings per share declined to 93 cents from $1.16 a year ago.

Rent-A-Center Inc plunged 21.0% to $17.64 after the rent to own furniture and electronics company lowered its current quarter earnings outlook.

The company tightened its third quarter revenues in the range between $1.00 billion and $1.02 billion from the previous estimate in the range between $1.00 billion and $1.05 billion.

The company also lowered its non-GAAP diluted earnings per share in the range between 85 cents and 95 cents from the previous guidance between $1.05 and $1.25.  

 

U.S. Core PCE Inflation Accelerated

The personal consumption expenditure price index rose 0.3% in August after falling 0.1% in July, Bureau of Economic Analysis said Friday. 

On a monthly basis, prices for goods declined 0.3% and for services rose 0.6% in August. Energy prices declined 5.5% but food prices rose 0.8%.  

The PCE price index, excluding food and energy, rose 0.6% on a monthly basis. 

The PCE price index on an annual basis increased 6.2%, slower than 6.4% in July but still elevated and significantly ahead of Fed's target rate of 2%. 

Core rate of inflation, excluding food and energy, rose 4.9% in August from a year ago and jumped 0.6% on a monthly basis. 

 

Eurozone Inflation Accelerates 

Consumer prices rose at the fastest annual pace 10.0% in September after rising at 9.3% in August, the Eurostat said Friday. 

The inflation rate in September increased to 1.2% from the previous month 

Inflation accelerated for the fifth month in a row and showed no signs of easing, raising pressure on the central bank to lift rates. 

Food, tobacco and beverages prices accelerated to 11.8% from 10.6% in August, energy prices rose 40.8% from 38.6% and services increased 4.3% from 3.8%. 

Among the larger member countries in the eurozone, Germany recorded the largest inflation rate of 10.9% in September from 8.8% in September, followed by Italy with 9.5% compared to 9.1% but the rate slowed in France to 6.2% from 6.1% and in Spain to 9.3% from 10.5%.  

Prices in Estonia, Latvia and Lithuania surged between 22% and 24.5% in the month on an annual basis. 

 

Euro Area Unemployment Rate 6.6% 

Seasonally adjusted unemployment rate was 6.6% in August, the Eurostat reported Friday. 

The jobless rate was stable from July and fell from 7.5% from a year ago

The unemployment rate was stable at 6.0% in August in the European Union from the previous month and declined from 6.8% a year ago. 

About 12,92 million people were unemployed in the European Union and 10.966 million were in the euro area. 

 

UK Revises Q2 GDP Rate Higher  

UK GDP growth was revised higher to 4.4% from a year ago from the previous estimate of 2.9%, the Office for National Statistics reported Friday. 

Despite the upward revision, the British GDP growth rate is still the smallest in five quarters.

The statistical office also revised the data for 2020 and 2021.  

UK GDP is now estimated to have contracted 11.0% in 2020, revised from the previous estimate of a fall of 9.3%. 

In 2021, UK GDP is estimated to have expanded by an upwardly revised 7.5% from the previous estimate of 7.4%.

 

Euro Area Indexes Down Third Quarter In a Row

European markets are set close down for the third quarter in a row for the first time since early 2011. 

The DAX index closed up 1.2% to 12,114.36, the CAC-40 index added 1.5% to 5,762.34 and the FTSE 100 index rose 0.2% to 6,893.11. 

For the quarter, the DAX fell more than 5%, the CAC-40 dropped 2.5% and the FTSE 100 index eased 4%. 

The Swiss Market Index spent the entire session in the negative territory and closed down 93.77 points or 0.92% to 10,126.99. 

For the quarter, the SMI is down about 5%. 

 

Europe Stock Movers 

Dignity PLC dropped 7.6% to 365.29 pence after the funeral-related services provider reported first-half loss on rising costs and falling revenue. 

Clariant AG increased 7.7% to 15.90 Swiss francs after Credit Suisse upgraded stock to "outperform" and lifted its price target. 

Webuild SpA jumped 5.6% to 1.26 euros after the company said its 2022 results are expected to be "significantly" ahead of the guidance. 

The company also won a contract worth