NEW YORK (dpa-AFX) – After the recovery at the start of the week, the US stock exchanges are expected to be weaker again on Tuesday. Disappointing quarterly figures and cautious outlook are making investors risk-averse again. Quarterly targets snapped by Snap renewed concerns about risks to economic growth and are likely to weigh on the entire tech sector.
Three quarters of an hour before the start of trading, broker IG rated the Dow Jones Industrial 0.6 percent lower at 31,693 points. The day before, the most important Wall Street index had increased by around two percent. The technology-heavy Nasdaq 100 is expected to be 1.7 percent weaker at 11,830 points at the start of trading, which would mean that the previous day’s gains would be lost again.
Charts for the values in the article
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Snap , the parent company of photo app Snapchat, announced last night that it will miss second-quarter profit and revenue guidance amid deteriorating macroeconomic trends. This caused the stock to drop by more than 30 percent before the market and put pressure on technology stocks in Asia and Europe in the morning.
Technology stocks have already been hit hard this year amid rising interest rates and high inflation. US social media stocks are now on track to lose more than $100 billion in market value following Snap’s profit warning. Meta is down just over 8 percent premarket and Pinterest is down 15 percent.
Jeffrey Halley, market analyst at Oanda Asia Pacific, once again highlighted the sharp swings in stock market sentiment and “that investors are fleeing at the first sign of trouble,” he wrote. “The market continues to turn inside-out and outside-in as it tries to decide whether to ignore all the upcoming rate hikes, the soft landing or the recession, inflation or stagflation, China, Ukraine, the US summer driving season , which has priced in supply chains and so on.”
Abercrombie & Fitch fell about 26 percent premarket after the fashion retailer reported an unexpected first-quarter loss. Best Buy recently gave up their premarket gains and lost 0.3 percent. While the consumer electronics retailer beat analysts’ expectations and outperformed some recent US retail companies, the company is now more cautious about annual sales.
Zoom, meanwhile, performed better than expected in the past quarter. In addition, the video conferencing service delighted investors with increased targets for sales and, above all, profit for the 2021/22 financial year, which ends at the end of July. The stock reacted before the market with a jump in price of around 3.5 percent. However, it has also suffered greatly in recent months – since the beginning of the year, the price has been down by more than 50 percent.
Tesla fell 3.1 percent premarket. In addition to the overall bad mood for the tech industry, news about a lawsuit alleging sexual harassment at the electric car maker’s largest California plant could weigh on it. Judge Stephen Kaus ruled that Tesla’s request for a closed arbitration hearing was denied. The worker who filed the lawsuit is allowed to go to court, even though she signed an arbitration agreement waiving her right to sue.
A takeover topic should also move: According to circles, Dexcom probably wants to take over the medical technology company Insulet and is in talks about it. If the deal goes through, it would create a giant in the diabetes equipment space, according to people familiar with the matter. Insulet rose a little more than 10 percent before the start of trading, Dexcom fell by almost 10 percent. Both companies declined to comment./ck/jha/
