Stocks waver as inflation concerns offset positive earnings

AFP , Wednesday 19 Oct 2022

Major stock markets fluctuated Wednesday as investors tracked soaring inflation and positive earnings results.

New York Stock Exchange
Traders work frantically on the floor of the New York Stock Exchange as stocks dropped more than 500 points on Monday, Oct. 19, 1987, in New York. Wednesday, Oct. 19, 2022, marks the 35th anniversary of day known as Black Monday. AP


In a sign of the uphill struggle in the battle against soaring prices, UK inflation jumped back above 10 percent last month.

London's FTSE 100 shares index dipped 0.2 percent and the pound fell following the data -- and as Britain's under-fire Prime Minister Liz Truss faced a grilling in parliament.

Sentiment was also dampened "by a sharp rise in US yields, as well as the US dollar, after Minneapolis Fed President Neel Kashkari said that the Federal Reserve would be in no position to pause on rate rises if inflation was still rising, even with the Fed Funds rate at 4.5 percent," said market analyst Michael Hewson.

Market movements have been dominated in recent months by interest rate hikes by the US Federal Reserve and other central banks as they try to rein in surging inflation.

Foreign exchange traders were keeping tabs also on whether the dollar would reach 150 yen, which would be a fresh high for 32 years.

Japan's currency is being hit hard as the country's central bank holds off from hiking interest rates, in sharp contrast to its peers.

Frankfurt and Paris stocks ended the day modestly lower.

While the Dow was up marginally in late morning trading, both the S&P 500 and tech-heavy Nasdaq Composite were lower.

"Fortunately, some strength is also being seen in the stocks of several widely-held companies that reported earnings," said analyst Patrick O'Hare.

Traders were given an extra boost by news that Netflix gained more than two million subscribers in July-September.

In Europe, Nestle's nominal sales surged in the first nine months of the year as the maker of Nespresso capsules, Purina pet food and Haagen-Dazs ice cream raised its prices in response to soaring inflation.

Nestle's shares ended the day down 1.3 percent, however, amid concerns about the impact of higher prices on sales volumes.

On commodity markets, crude oil prices rose on renewed supply worries.

They had slumped Tuesday on bets that US President Joe Biden would order the release of more barrels from the country's emergency reserves in order to keep fuel prices subdued heading into mid-term elections.

Key figures around 1530 GMT

New York - Dow: UP less than 0.1 percent at 30,529.07 points

EURO STOXX 50: UP 0.2 percent at 3,471.24

London - FTSE 100: DOWN 0.2 percent at 6,924.99 (close)

Frankfurt - DAX: DOWN 0.2 percent at 12,741.41 (close)

Paris - CAC 40: DOWN 0.4 percent at 6,040.72 (close)

Tokyo - Nikkei 225: UP 0.4 percent at 27,257.38 (close)

Hong Kong - Hang Seng Index: DOWN 2.4 percent at 16,511.28 (close)

Shanghai - Composite: DOWN 1.2 percent at 3,044.38 (close)

Pound/dollar: DOWN at $1.1246 from $1.1332 on Tuesday

Dollar/yen: UP at 149.75 yen from 149.21 yen

Euro/dollar: DOWN at $0.9785 from $0.9862

Euro/pound: DOWN at 86.98 pence from 87.01 pence

Brent North Sea crude: UP 0.9 percent at $90.83 per barrel

West Texas Intermediate: UP 0.8 percent at $83.46 per barrel

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