Stocks Slip After Disappointing US Economic Data, Earnings Reports

Strategic Insights -

The US stock market closed lower after a dismal first quarter for the economy, with the S&P 500 falling 0.17%, the Dow Jones Industrial Average declining 0.15%, and the Nasdaq down 0.36%. Weak personal income and spending data, coupled with underwhelming earnings reports from major companies, weighed on investor sentiment. The US economy's first-quarter performance has raised concerns among investors and economists, with the latest data painting a gloomy picture.

Key Takeaways:

  • The S&P 500, Dow Jones Industrial Average, and Nasdaq all closed lower, with the S&P 500 falling 0.17% and the Nasdaq down 0.36%.
  • Real personal income dipped 0.2% in March, compared to an expected increase of 0.2%, while personal spending was lower than expected, increasing 0.3% from a flat reading the month earlier.
  • Time Warner Cable (TWC) earned $1.65 a share, lower than an estimated $1.88, while Salesforce.com (CRM) soared 11.6% after Bloomberg reported the company is working with financial advisers to field takeover offers.
  • Exxon Mobil's first-quarter earnings of $1.17 a share beat estimates by 35 cents, while its revenue of $67.62 billion plummeted 36.7% from a year earlier.
  • Yelp's (YELP) shares plummeted 16.8% after issuing weak guidance in its second quarter and full year, while Royal Dutch Shell (RDS.A) was slightly higher despite reporting a 56% decline in first-quarter earnings.
  • The oil giant has suffered from plummeting commodity markets since prices began their descent last summer, with West Texas Intermediate crude hitting its highest level this year at $59.15 a barrel.

Statistics:

  • Initial jobless claims for the week ended April 24 dropped by 34,000 to 262,000, compared to an expected reading of 288,000.
  • Japan's Nikkei closed nearly 3% lower after the Bank of Japan left interest rates unchanged.
  • China's Shanghai Composite dropped 0.78% after steel demand fell 6% in the first quarter, the first decline for that quarter in the past 20 years.
  • European markets were all lower despite eurozone deflation pausing in April, with Germany's unemployment rate falling in April, though at a slower-than-expected pace.
  • Exxon Mobil's revenue of $67.62 billion plummeted 36.7% from a year earlier.
  • Time Warner Cable's sales climbed 3.5% to $5.78 billion, below expectations for $5.83 billion.

Sources:

  • TheStreet
  • Bloomberg
  • The Wall Street Journal
  • US Bureau of Economic Analysis
  • US Department of Labor
  • Japan's Nikkei newspaper
  • China's Shanghai Securities News
  • European Central Bank