At the close of trading on Thursday, American stock exchange indicators significantly decreased as a result of the sale that began at the end of the session. At the same time, at the beginning of the day, stock indices showed steady growth against the background of a decrease in the yield level of US government bonds and strong quarterly reports of large corporations.
As a result, the Nasdaq Composite sank 1.3% to 14,154 points and moved into correction territory for the first time since March 2021. Yesterday's trading result of the leading index was the lowest since June of last year, and since the beginning of the current Nasdaq has already lost about 12%.
The Dow Jones Industrial Average fell 0.9% the day before and closed at 34,715 points. By the way, DJIA has been showing a permanent drop for the fifth day in a row. Such a prolonged cycle of decline in the stock indicator has become the longest since September 2021. The main outsiders among the components of the leading stock index were securities of Dow Inc. (-3.4%), Intel Corp. (-3%), and Home Depot Inc. (-2.8%).
The S&P 500 stock indicator decreased by 1.1% to 4,482 points.
Market analysts say that the sale that began by the end of Thursday's trading is a predictable phenomenon. Some investors used the morning growth of the indices to reduce the losses incurred on previous sales. Thus, market participants are trying to find the real bottom and understand how far the current situation will go. Traditionally, such sales on the market last for several days.
By the way, since the beginning of the week, many investors have transferred funds from corporations in the fast-growing technology sector to companies in the financial and oil and gas industry. It is expected that these areas of the market will show high results in the coming year.
On Thursday, the focus of traders' attention was still on the possibility of repeated increases in interest rates and the growing level of inflation, which reached its highest since the summer of 1982.
In anticipation of the decisive steps of the Federal Reserve, investors are selling government bonds, which increases their profitability and negatively affects the shares of technology companies. Thus, the future profits of large corporations lose their significance against the background of profits from bonds with permanently increasing yields.
On Thursday, the yield level of 10-year Treasury bonds of the United States increased to 1.833%.
In addition, several important economic reports were published in the United States the day before.
Thus, the number of initial applications for unemployment benefits last week increased by 55,000 (from 231,000 to 286,000) - the highest figure since October 2021.
Meanwhile, in December, sales in the secondary housing market in the United States decreased by 7.1% compared to the same period of the previous year.
In addition, investors' attention is still focused on the financial statements of leading American corporations for the last quarter.
So, on the eve of the largest American Internet provider of TV series and movies, Netflix Inc. reported a profit that exceeded analysts' forecasts for the fourth quarter. At the same time, Netflix representatives suggested a weak growth in the number of subscribers in the first quarter of the coming year. Against the background of this statement, the value of the securities of the American entertainment company sank by 20% in over-the-counter trading. Such a spectacular collapse on Thursday deprived Netflix shares of most of the gains acquired during the COVID-19 pandemic.
According to the results of the fourth quarter, one of the world's leading airlines, United Airlines Holdings, reduced its net loss and increased revenue. However, the positive reporting of the corporation did not save its securities from falling. So, on the eve of the United Airlines shares lost 3.4% in price against the background of a pessimistic scenario in terms of air traffic volumes in the near future.
Meanwhile, American Airlines Group's stock quotes lost 3.2%, despite the company's reduction in the net loss by more than 2 times in the fourth quarter and an increase in revenue to a level that exceeded analysts' forecasts.
The share price of the American aluminum company Alcoa increased by 2.7% amid a noticeable increase in net loss due to restructuring costs. At the same time, the corporation's net profit reached a record for the whole of 2021.
The value of securities of the oilfield services company Baker Hughes Co. increased by 1.6% due to quarterly revenue exceeding economists' forecasts. At the same time, in the fourth quarter, Baker Hughes Co.'s net profit fell by 55%.
Stock quotes of the railway operator Union Pacific Corp. jumped by 1.1%. In the last quarter, the company's net profit and revenue significantly exceeded analysts' preliminary scenarios and grew by 24% and 11.5%, respectively.