The U.S. stock market had a neutral trading session after yesterday it made an unsuccessful pullback attempt, which ended with another plum. Dow Jones Industrial rose by a symbolic 0.27%, while the broad market index S&P 500 and Nasdaq ended trading at a loss of seven and three hundredths percent, respectively.
Neutral means versatile. Big Tech had a nice mix of gains in Amazon (AMZN) +1.42%, Apple (AAPL) +1.3% and Microsoft (MSFT) +1.47%, with declines in Alphabet (GOOG) -0.28%, Nvidia (NVDA) -2.75% and Tesla (TSLA) -1.79%. The top gainer in the Dow Jones Index was naturally McDonalds (MCD), but yesterday’s favorite, oil giant Chevron (CVX) -1.97% along with construction equipment maker Caterpillar (CAT) -2.11% led the outsiders Wednesday.
Oil Sold Off Energy Assets
The energy sector as a whole has fared terribly amid changes in oil prices. West Texas Intermediate (WTI), which reached $114 a barrel on Tuesday, decided to press its luck with a corrective decline to $110. And futures contracts for European benchmark Brent fell to $112.
A trader on the New York Stock Exchange watches Bed Bath & Beyond (BBBY) stock fall. Photo: CNBC
You could say Chevron still got off easy. Industry peers suffered far more serious losses. Shares of ExxonMobil (XOM), the largest U.S. oil company, fell 3.69% and ConocoPhillips (COP), a member of the Big Three, fell 3.95%. EOG Resources (EOG), Occidental Petroleum (OXY) and Marathon Petroleum (MPC) were all down more than 4%, while investors in Valero Energy (VLO) and Devon Energy (DVN) saw their assets fall 6%.
Bed Bath & Beyond is also looking for a bottom
Retailers continue to terrify investors. Shares of Bed Bath & Beyond (BBBY) plummeted 23% to a one-year low on the back of quarterly reports that were a complete disappointment on both earnings and revenue. Net sales plummeted 25% from a year ago, and a sharp decline in gross margin led to a net loss of $358, or $4.49 per share.
Supply chain difficulties and a possible recession could make it difficult for Bed Bath & Beyond to recover in the near future. It could get to the point where operating cash flow could turn negative. Against this backdrop, Mark Tritton has been ousted as president and CEO, and the new head’s main task will be to fix the cash flow morass.
It’s hard to believe, but the company, instead of devoting resources to strengthening the business itself, was spending money to buy back shares from the market. I am embarrassed to ask, what would have happened to BBBY stock without the buybacks? After all, even with such support from the issuer itself, the paper has lost 67% this year alone, and has fallen more than 85% in the last 52 weeks. Here’s how it looks on the chart
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Source: Nasdaq
Morgan Stanley pleased Carnival shareholders
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Funny” analysts at investment bank Morgan Stanley released this analysis. They not only reduced the target price for the shares of the cruise operator Carnival (CCL) -14,13% twice, they allowed the potential fall of the company’s securities to zero on the background of another stagnation of the industry. This became sobering bell for other long-suffering representatives of the sector. Against this background, shares of Royal Caribbean and Norwegian Cruise Line lost about 10%
Tension in the market remains the same
Worries of investment community about economic slowdown and aggressive increase of Federal Reserve rates occupied most of the first half of this year, nevertheless fears about the coming recession continue to hover morosely over the US stock market
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U.S. Federal Reserve Chairman Jerome Powell. Photo: Newyorker.com
Analysts at Wells Fargo, for example, do not see the possibility of any serious upward movement. In their opinion, the market expects nothing but volatility over the summer period until investors believe that Jerome Powell’s agency has switched to a more down-to-earth 25 basis point rate hike from the current aggressive steps of 50-75.
The Dow Jones and S&P 500 are on the verge of another record high
. It’s past the equator this week, and from all appearances, the stock market is about to repeat its worst half-year performance in 52 years. Back in 1970, the S&P 500 Index was down 21% in its first six months. As for quarterly data, the DJI and S&P are on the verge of another “achievement” since 2020, and the Nasdaq is close to its worst three-month cycle since 2008.
But all is not yet lost. Two days to the end of the weekend is plenty. Both one way and the other.
