U.S. stocks fell on Thursday, with jobless claims rising for the first time since March last week, sparking concerns about the outlook for economic recovery and a sell-off in technology stocks dampened sentiment. By the end of the day, the Dow was down 353.51 points, or 1.31%, at 26652.23, the Nasdaq was down 2.29% to 10461.42, and the S & P 500 index was down 1.23% to 3235.66. The CBOE fear index VIX rose 7.2% to 26.08.
Individual stock performance
Intel announced its results after hours, with revenue of $19.73 billion in the second quarter, a year-on-year increase of 20%. The market is expected to be $18.55 billion, with EPS 1.23 per share and an expected $1.11. The company announced that the production time of 7 nm process CPU was delayed by about 12 months compared with the original plan. As a result, Intels stock price fell 9% after hours.
Bank of America rose nearly 1%, SEC documents show that the God of stocks Warren Buffett bought nearly 34 million shares of company stock, worth $813 million, from Monday to Wednesday at an average price of $24 A share. This increased Berkshire Hathaways stake in Bank of America from 3.6% to 11.3%, totalling 982 million shares.
Tesla fell 5.0% after the company reported better than market expectations in the second quarter and made profits for four consecutive quarters. However, according to a report by Barclays analyst Brian Johnson, which previously set a target price of $300, Teslas share price is likely to begin to reverse in the fourth quarter and is unlikely to reach its 500000 vehicle delivery target this year.
Technology stocks were in the doldrums, with apple down 4.5% among the five faang giants. On the news, court documents showed that Apple was facing investigations from consumer protection agencies in many places, including Texas, and may delay the launch of its new 5g phone. Facebook, Amazon and Google fell more than 3%, while NYSE fell 2.5%.
Initial data rebound, Republicans delay release of stimulus bill
U.S. Treasury Secretary manuchin said on Thursday that the republican new crown aid bill will expand unemployment protection based on about 70% salary replacement, which will be the basis of negotiations between the Republican Party and the Democratic Party. It is widely expected that Republicans will extend the duration of unemployment benefits, but the level is lower than the requirements of the Democratic Party several times. Mr. mnuchin also said Trumps wage tax cuts would not be included in the new bailout bill.
Under pressure, the yield of 10-year Treasury bonds fell 1.8 basis points to 0.577%, the lowest since April 24, and the yield of 30-year treasury bonds fell 5.8 basis points to 1.232%, the lowest since May 1. The U.S. Treasury Department auctioned $17 billion of 20-year treasury bonds on Wednesday afternoon, but increased supply did not dampen strong demand.
International gold prices continued to rally, with Comexs August gold futures up 1.3% to $1890.00/oz, approaching the record high set in August 2011.
Institutional Analysis of the reasons for the downturn of technology stocks
Christopher Harvey, a senior analyst at Wells Fargo, points out that with the sharp rise in large cap technology stocks, the market is now more and more similar to the late 1990s. On the whole, our medium-term concern is that this kind of inflation may destabilize the market and trigger violent volatility, especially at a time when investors have not fully considered political risks. According to the report.
Adam crisafulli, an analyst at vitalknowledge, said in a report that U.S. stocks were suffering as investors sold off technology stocks. He believes that technology stocks are obviously overbought and overvalued, the market has high expectations for star stocks, and these companies may lack more reasons to support performance or share price rise.
The economic outlook has become a potential negative factor. Beth Ann bovino, the chief U.S. economist at S & P, recently published a paper saying that with the rapid rise of confirmed cases in the United States, the uncertainty of the U.S. economy is rising again. Real time economic data suggest that the US economic recovery may be losing momentum. S & Ps global economy now thinks that the possibility of a worse outcome for the US economy is 30% - 35%, higher than the 25% - 30% previously predicted, and the severe epidemic situation may further prolong the duration of the economic recession.
Investors have turned their attention to the negotiation process of a new round of fiscal stimulus bill. Michael feroli, JPMorgans chief U.S. economist, warned on Thursday that the U.S. is in danger of falling off the fiscal cliff if Congress does not introduce the stimulus plan in time, which will be a major setback for the U.S. economy.
Crude oil and European stocks
International oil prices fell on Thursday as increased U.S. crude oil inventories and market concerns about the outbreak outweighed the impact of a weaker dollar. WTI crude oil contract closed at $41.07/barrel, down 2.0%, while Brent crude oil contract closed at $43.28/barrel, down 2.3%.
According to the EIA data released by the US energy information administration, US crude oil inventories increased by 4.892 million barrels last week, far higher than market expectations. Inventories in Cushing, Oklahoma, rebounded for the third consecutive week. Crude oil production capacity rose by 100000 barrels to 11.1 million barrels / day in the same week.
Lukman otunuga, an analyst at fxtm, said the unexpected increase in US crude oil inventories last week could raise doubts about OPEC +s adjustment of the production reduction agreement earlier this month. In view of global economic expectations and the spread of the epidemic, oil prices are still facing downward risks.
European stocks eased after a high opening on Thursday. The pan European Stoxx 600 index rose 0.06% to 373.65, the FTSE 100 index rose 0.07% to 6211.44, Germanys DAX30 index fell 0.01% to 13103.39, and Frances CAC40 index rose 0.07% to 6211.44. Unilever rose 8.5%, the companys second quarter revenue and net profit were better than market expectations. After a new round of negotiations between the UK and the EU, EU chief negotiator Barnier said the two sides had no progress on key issues such as fisheries, but he insisted that the negotiations were constructive. However, Britains position made it very difficult to reach a trade agreement. British negotiator Robert Frost said that no agreement will be reached this month, and although he continues to actively seek an agreement with the European Union, he must face the possibility that no agreement can be reached. GBP / EUR bottomed up, trading around 1.2730. Source of this article: Yang Bin, editor in charge of the first finance and Economics_ NF4368
European stocks eased after a high opening on Thursday. The pan European Stoxx 600 index rose 0.06% to 373.65, the FTSE 100 index rose 0.07% to 6211.44, Germanys DAX30 index fell 0.01% to 13103.39, and Frances CAC40 index rose 0.07% to 6211.44. Unilever rose 8.5%, the companys second quarter revenue and net profit were better than market expectations.
After a new round of negotiations between the UK and the EU, EU chief negotiator Barnier said the two sides had no progress on key issues such as fisheries, but he insisted that the negotiations were constructive. However, Britains position made it very difficult to reach a trade agreement. British negotiator Robert Frost said that no agreement will be reached this month, and although he continues to actively seek an agreement with the European Union, he must face the possibility that no agreement can be reached. GBP / EUR bottomed up, trading around 1.2730.