U.S. Stocks Close Lower; Dow Ends Five-Day Winning Streak as Markets Focus on Earnings and Strait of Hormuz Deal
By early Friday, Beijing time, U.S. stocks had closed lower Thursday. The Dow Jones Industrial Average ended a five-session winning streak as traders monitored developments in the Middle East. An agreement to reopen the Strait of Hormuz was moving forward, while investors were also digesting a large volume of corporate earnings reports. The Dow fell 464.02 points, or 0.85%, to 53,885.10. The Nasdaq Composite fell 15.09 points, or 0.06%, to 26,348.35, while the S&P 500 declined 13.53 points, or 0.18%, to 7,710.02. One company's shares fell 3.2% after it announced a management restructuring. Shares of an unnamed memory-chip company fell 6.8% after its fourth-quarter results failed to impress investors. AppLovin plunged 19.7% after reporting mixed quarterly results. Another unnamed company fell 13% after its first-quarter guidance disappointed investors, although its fourth-quarter results exceeded expectations. JJ Kinahan, head of retail expansion and alternative-investment products at the Chicago Board Options Exchange, said, “After a wave of active trading sparked by earnings season, the market seems to be mostly taking a breather. Better-than-expected profits and sales, when accompanied by weak forward guidance, do not always push a stock higher.” He also said that “some profit-taking may also be taking place,” noting that SanDisk and Western Digital had both surged sharply over the past year. Over the past 12 months, SanDisk had soared 3,000%, while Western Digital had gained more than 500%. Oil prices rose Thursday after Iranian state news, citing a member of Iran's parliament, reported that a draft governing vessel passage through the Strait of Hormuz would reportedly ban U.S. and Israeli ships from using the key waterway. Iran's Fars news agency said the plan was being reviewed by a committee of the Iranian parliament. In addition, a tanker that recently transited the strait heard explosions near the coast of Oman. Nevertheless, Iran and Oman remained close to reaching an agreement to reopen the Strait of Hormuz. An Iranian government official told MS NOW that under an interim agreement, shipping through the waterway would be exempt from fees or tolls. Jim Reid, a strategist at Deutsche Bank, wrote, “Markets have witnessed multiple false dawns in this conflict. Although the details are becoming more concrete, the focus has now shifted from whether an agreement can be reached to what the final arrangement will look like, including the unresolved question of whether Iran will ultimately be allowed to charge tolls on vessels using the strait.”
The Dow fell 464.02 points, or 0.85%, to 53,885.10. The Nasdaq Composite fell 15.09 points, or 0.06%, to 26,348.35, while the S&P 500 declined 13.53 points, or 0.18%, to 7,710.02.
One company's shares fell 3.2% after it announced a management restructuring. Shares of an unnamed memory-chip company fell 6.8% after its fourth-quarter results failed to impress investors. AppLovin plunged 19.7% after reporting mixed quarterly results. Another unnamed company fell 13% after its first-quarter guidance disappointed investors, although its fourth-quarter results exceeded expectations.
JJ Kinahan, head of retail expansion and alternative-investment products at the Chicago Board Options Exchange, said, “After a wave of active trading sparked by earnings season, the market seems to be mostly taking a breather. Better-than-expected profits and sales, when accompanied by weak forward guidance, do not always push a stock higher.”
He also said that “some profit-taking may also be taking place,” noting that SanDisk and Western Digital had both surged sharply over the past year. Over the past 12 months, SanDisk had soared 3,000%, while Western Digital had gained more than 500%.
Oil prices rose Thursday after Iranian state news, citing a member of Iran's parliament, reported that a draft governing vessel passage through the Strait of Hormuz would reportedly ban U.S. and Israeli ships from using the key waterway. Iran's Fars news agency said the plan was being reviewed by a committee of the Iranian parliament.
In addition, a tanker that recently transited the strait heard explosions near the coast of Oman.
Nevertheless, Iran and Oman remained close to reaching an agreement to reopen the Strait of Hormuz. An Iranian government official told MS NOW that under an interim agreement, shipping through the waterway would be exempt from fees or tolls.
Jim Reid, a strategist at Deutsche Bank, wrote, “Markets have witnessed multiple false dawns in this conflict. Although the details are becoming more concrete, the focus has now shifted from whether an agreement can be reached to what the final arrangement will look like, including the unresolved question of whether Iran will ultimately be allowed to charge tolls on vessels using the strait.”