Strong quarterly results rise in US stocks.. I ignored economic data

Strong quarterly results rise in US stocks.. I ignored economic data
Strong quarterly results rise in US stocks.. I ignored economic data

US stock indexes rose at the open yesterday, supported by gains in “Caterpillar”, “Merck” and “Ford” shares, after strong quarterly earnings data, ignoring data that revealed the US economy slowed sharply in the third quarter. According to “Reuters”, the Dow Jones Industrial Average rose 54.72 points, or 0.15 percent, to 35,545.41 points. The Standard & Poor’s 500 Index increased by 11.16 points, or 0.25 percent, to 4,562.84 points. The Nasdaq Composite Index rose 68.90 points, or 0.45 percent, to 15,304.74 points.
On the other hand, the performance of European stocks varied without a clear trend, whether up or down, yesterday, and some leading automakers warned of production damage due to a shortage of chips, while a limited number of companies announced positive results.
The European Stoxx 600 index fell 0.01 percent after global stocks fell from their previous highs, on the back of global supply chain problems, which were highlighted with the announcement of companies’ results.
And Volkswagen, the largest carmaker in Europe, fell 2.7 percent, after it cut its forecast for the units to be delivered and announced lower-than-expected quarterly profit due to the global shortage of chips. The auto sector index fell 0.7 percent.
On the positive side, “Airbus” stock rose 2.8 percent, after the company raised the targeted financial levels for the whole year.
In Asia, Japanese stocks fell yesterday, due to disappointing expectations from technology companies, which led to a demand for selling, but the gains of major companies related to chips limited the losses.
The Nikkei index closed down 0.96 percent at 28,820.09 points, while the broader Topix index fell 0.7 percent to 1999.66 points.
“I expected some companies to deliver below market expectations in the current earnings season, but the downward revision was a big surprise. This hurt investor sentiment,” said Shigetoshi Kamada, general manager of research at Tachibana Securities.
He added, “Investors are awaiting Toyota’s results next week, because auto companies are affecting their related sectors.”
Shares of robotics maker Fanuc plunged 8.66 percent after it cut expectations for the current year, attributing it to a shortage of chips and other components.
Hitachi shares lost 1.92 percent, as production cuts by automakers due to chip shortages affected the technology company.
And Fujitsu, the computer hardware maker, tumbled 8.14 percent, after its expectations fell short of market estimates.
On the other hand, “Shin Etsu Chemical” rose 2.89 percent, and “Screen Holdings” for chipmaking equipment jumped 8.22 percent, supported by strong results.
The shares of their counterparts “Tokyo Electron” and “Advantest” also rose 2.02 percent and 5.03 percent, respectively, which limited the overall losses of the Nikkei Index.
The airline index was one of the sectors that gained among the 33 sub-indices, rising 0.55 percent amid a sharp drop in new Covid-19 infections.

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