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Wall Street fell sharply. The Nasdaq in particular slipped.
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Investors were quite taken aback by the second wave of corona rolling across Europe and the US. This could also be seen on the price signs in New York, because they were largely colored red. The fear is that more and more states will tighten their corona measures in an attempt to stop the rapidly advancing virus. These could be a major blow to the economy, which is still recovering from the corona wave in March.
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De Dow Jones
headed 3.4 percent lower. Anyone who thought technology stocks would offer protection will be disappointed on Wednesday, as the Nasdaq technology exchange slipped 3.7 percent.
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Big tech
And even with big tech, investors could not hide. All major tech players went down. Facebook
slipped 5.5 percent, Alphabet
got a hit of 5.5 percent, Microsoft
had to drop 5 percent, Apple is down 4.6 percent and Amazon
loses 3.8 percent.
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Until recently, these stocks were considered completely ‘corona-proof’, because they support the new economy of working from home and consuming at home. The five largest tech companies in the US account for more than a fifth of the broad gauge S & P500 and are largely responsible for the strong recovery that the US stock market indicators have made. But now investors seem to be wary of the high valuations. Ultimately, a major blow to the economy can also cause problems for these companies, because society is losing prosperity and therefore has less money to purchase their products.
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Corona sensitive stocks
Corona-sensitive stocks will also suffer. Cruise shares again sold sharply. The cruisers Carnival (-10.6%), Norwegian Cruiseline Holdings (-9.1%) and Royal Caribbean (-7.4%) suffered serious damage. Cruise ship operators are feeling the pandemic crisis hardest as they have seen the number of passengers drop sharply due to restrictive measures and a great fear among consumers of contracting the virus on board a cruise ship.
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Equities that are very sensitive to the economy also do poorly. Caterpillar lost more than 4 percent, MGM Resorts thundered 4.5 percent, Marathon dipped 2.5 percent lower and Halliburton was hit by almost 9 percent.
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General Electric
General Electric (GE) surprised investors with a profit, pushing the stock 4.5 percent higher on a particularly bad trading day. The company posted earnings per share of 6 cents in the third quarter. That is 15 cents less than a year earlier, but much better than the loss of 4 cents that the analyst army was aiming for. Sales fell 17.1 percent to $ 19.4 billion. That was also better than the market expectation of 18.7 billion.
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GE CEO Larry Culp is pleased with the results. ‘I am proud of the results we have achieved this quarter. We are improving our earnings and cash generation performance as we see an increase in our organic profit margin in every segment except the aircraft business, despite orders remaining under pressure. ‘
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The aircraft division did not do well because the corona crisis has caused considerable damage to the aircraft sector. Due to the crisis, there is much less travel, while many airline costs continue to run. The aircraft division saw sales fall by a hefty 39 percent to 4.9 billion dollars. Orders in this branch also fell by 54 percent.
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Mastercard
Mastercard
performed less well than expected in the third quarter. Because both tourists and business people travel less – and therefore also make fewer purchases with their credit card – Mastercard recorded a 36 percent decrease in cross-border transaction volumes in local currencies. Net profit fell 28 percent to $ 1.5 billion. Adjusted earnings per share were $ 1.60 per share and were lower than the $ 1.66 that analysts were expecting.
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The stock plunged 8.1 percent lower.
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