NEW YORK (dpa-AFX) – After two positive months on the stock market, US equities did not get off to a good start in December. After the previous day’s price rally, calm returned on Thursday. The major Dow Jones Industrial Index fell 0.56% to 34,395.01 points but capped larger losses in trading. A bleak business outlook for software vendor Salesforce put a damper on the mood. The day before, the prospect of a less drastic rate hike by the US Federal Reserve in December had pushed the Dow to its highest level since April.
The market-wide S&P 500 closed moderately down 0.09% at 4076.57 points. The heavyweight Nasdaq 100 ended the day up 0.10% at 12,041.90 points. The barometer for the interest-sensitive tech stock market had jumped 4.6% the day before. According to Fed Chairman Jerome Powell, the time for more moderate rate hikes could have come as early as December. This had triggered a rally for high-growth, interest-rate-sensitive tech stocks.
Investors have reacted with disappointment to the business prospects of cloud software specialist Salesforce. Its stock plunged a full eight percent as by far the Dow’s biggest loser. The economic slowdown and unfavorable exchange rates have taken a toll on Salesforce, wrote Bank Jefferies analyst Brent Thill. The departure of co-chief Bret Taylor caused further difficulties. The two-manager model hasn’t worked, Thill says.
Atop the Nasdaq 100, shares of Okta are up more than a quarter to their highest level since early September. The Internet software developer expects a significantly smaller loss in the coming year than initially announced.
Shares of software provider Snowflake are up nearly 8%. In pre-market trading, the company’s weak outlook had weighed on the price. However, analysts at major investment banks such as JPMorgan and Morgan Stanley remain optimistic about Snowflake’s growth prospects.
A profit warning from department store chain Dollar General sent the stock price down 7.5%. Recently, customers are increasingly preferring products that are less profitable for the business, and supply chains are causing additional costs for Dollar General.
According to statements by Fed Chief Powell the previous evening, the US dollar’s losses continued in the foreign exchange market, as the euro climbed above the $1.05 mark to $1.0523 last time out. The European Central Bank had previously set its key rate at $1.0454. The dollar had therefore cost 0.9566 euros.
Powell’s comments also had an effect on bond trading as US Treasuries extended the previous day’s gains. The futures contract for 10-year bonds (T-Note Future) rose 1.02% in the late bond sector to 114.38 points. In return, the 10-year Treasury yield fell to 3.52%./bek/jha/
— By Benjamin Krieger, dpa-AFX —
