Stocks were mixed on Wednesday after the latest round of earnings prompted concern among investors over the economic outlook, adding to the angst over painfully high interest rates, while benchmark US Treasury yields and the dollar ticked up.
In Europe, the Stoxx 600 was little changed, after coming under pressure from a near-60 per cent slump in shares of Worldline after the French payments company cut its financial targets. In a heavy day for bank earnings, Deutsche Bank was an outlier, with a 7 per cent rise in its shares.
Weighing on the US indexes were shares in Alphabet, which fell 8.7 per cent after the company reported another slowdown in its cloud business, while Microsoft shares rose 2.3 per cent after it beat estimates.
“Tech earnings got off to a mixed start last night thanks to a focus on cloud computing, one of the big money spinners for the sector,” Chris Beauchamp, IG Group chief market analyst, said.
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“Stocks have picked up somewhat in the past 24 hours, but it’s now up to Meta tonight and Amazon tomorrow to provide the kind of good news that might give stocks a reason to rally into month-end.”
Dublin
PTSB’s shares fell on Wednesday as its share of new mortgage lending contracted in the third quarter and its corporate broker signalled that it plans to lower income growth estimates for the bank for next two years.
The bank, which rebranded this month from Permanent TSB, said in a trading statement that it share of mortgage market drawdowns was 20.7 per cent for the first nine months of the year. The bank’s shares were trading 3 per cent down at €1.93 near the close of the session on Wednesday. Rivals, Bank of Ireland and AIB also lost ground and on weak trading session for financials, falling 0.3 per cent and 0.8 per cent, respectively.
As US airline JetBlue announced plans for daily non-stop transatlantic flights from Dublin to New York and Boston, Iseq heavyweight Ryanair shares fell by 1.3 per cent to €14.35. After a strong week, PaddyPower Betfair owner Flutter traded down 1 per cent at €148.50.
Europe
European markets closed mixed Wednesday amid a slew of earnings both in the US and Europe. The pan-European Stoxx 600 index ended little changed from the previous session, with sectors pointing in opposite directions.
Mining stocks rose 0.9 per cent to lead gains, while retail stocks fell 1.3 per cent. Deutsche Bank shares provisionally ended over 8 per cent higher. Germany’s biggest lender on Wednesday reported a third-quarter net profit of €1.031 billion, beating expectations despite an 8 per cent fall on the previous year and ongoing struggles in the lender’s investment unit.
Banking stocks fell Tuesday as Barclays warned of cost-cutting charges. Earnings are also out from Heineken, AkzoNobel, Lloyds Banking Group and Carrefour.
London
London’s top index finished higher despite a “choppy” session as it was supported by strong commodity prices.
Banking stocks also had a more positive day after a solid update by Lloyds helped to improve sentiment after weakness earlier this week. The FTSE 100 moved 0.33 per cent, or 24.64 points, higher to finish at 7,414.34.
Michael Hewson, chief market analyst at CMC Markets UK, said: “The FTSE 100 has been helped by reports from Beijing that China would be stepping up spending plans on infrastructure to generate an economic bump in Q4 which has lifted metals prices, and ergo mining stocks, with Rio Tinto and Glencore higher.
“It’s been another day of choppy trading for markets in Europe with the latest company results indicating a range of fortunes for various businesses over the last quarter.
New York
Wall Street grappling with a batch of corporate earnings sent stocks lower on Wednesday amid heightened Treasury volatility, with traders also keeping an eye on the latest geopolitical developments.
The S&P 500 dropped as much as 1.1 per cent before paring some losses. The Nasdaq 100 underperformed as Google’s parent Alphabet’s disappointing cloud figures outweighed Microsoft’s sales. A gauge of chipmakers slid 2 per cent on Texas Instruments’s bearish forecasts.
Longer-dated US yields outpaced those in shorter-maturity bonds – a process known as “bear steepening.” Oil fluctuated after a news report that Israel agreed to delay the ground invasion of Gaza to protect US troops.
Traders are looking for evidence on how companies are coping with high interest rates and whether consumer spending is changing because of inflation. Facebook parent Meta Platforms is set to report its numbers later Wednesday, with Amazon’s results due Thursday.
“The question now turns to earnings as earnings drive stock prices,” said Howard Ward, chief investment officer of Growth Equities and portfolio manager at Gabelli Funds. – Additional reporting Reuters/Bloomberg
