Wall Street ends ugly April with more losses

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Photo: Getty
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Wall Street stocks concluded a bruising April on an ugly note Friday following disappointing results from Amazon, while European and Asian markets forged higher.

Amazon plunged 14.1 percent after offering a disappointing forecast as it battles rising costs amid slowing growth compared with earlier in the pandemic. The company reported its first loss since 2015.

The results were the latest in a mixed bag of earnings from large tech stocks, which are widely held and play an important role in major indices.

"Amazon was the latest to catch Wall Street off guard, reporting its first loss since 2015 amid a multitude of challenges facing the company," said Craig Erlam, analyst at forex platform OANDA.

"Like many others, the company is struggling to adjust to post-pandemic life, having scaled up massively over the last couple of years," Erlam said.

The company's downcast outlook "reminded investors about the slowing growth prospects in an inflationary environment," Briefing.com said.

Declines by Amazon and other tech giants Apple and Intel contributed to a 4.2 percent drop in the Nasdaq. The tech-rich index has fallen 13 percent in April.

For equity markets, "an abundance of headwinds remained, most notably expectations of an aggressive Fed tightening cycle, lockdowns in China, persisting inflation concerns, rising interest rates and the recent jump in the US dollar," Charles Schwab investment bank said.

Earlier, European stock markets finished higher as investors shrugged off data showing that the eurozone's economy had slowed to 0.2 percent in the first quarter while inflation stayed at record levels.

There was also some much-needed good news for China's embattled tech sector.

The official Xinhua news agency reported that a meeting of the government's decision-making body ended with officials saying it was "necessary to promote the healthy development of the platform economy" and "complete its rectification."

The report suggests an easing of the sweeping clampdown on the country's biggest firms. This boosted tech behemoth Tencent's share price - in turn triggering rallies in Prosus (8.5%) and Naspers (+8%) on the JSE.

In the Politburo meeting chaired by President Xi Jinping, officials also said there was a need to "respond to market concerns in a timely manner."

Hong Kong stock markets closed up four percent and Shanghai put on more than two percent.

In foreign exchange, the dollar dropped on profit-taking after surging to multi-years highs against the yen and euro this week, with the US Federal Reserve set to aggressively hike interest rates to combat soaring inflation.

The rand was last trading at R15.81/$.

Elsewhere, oil prices were mixed as Russian supply fears help to offset weaker demand concerns fueled by China's lockdowns.

But ExxonMobil reported that first-quarter profits more than doubled to $5.5 billion as high oil prices more than made up for $3.4 billion in costs connected to exiting its Sakhalin project in Russia.

At rival Chevron, profits came in at $6.3 billion, more than four times the year-ago level on a 70 percent rise in revenues to $54.4 billion.


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