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U.S. Stocks Close Weak On Growth Concerns, Geopolitical Tensions

wallstreet july24 02aug22 lt

U.S. stocks closed on a weak note on Tuesday as rising tensions between the U.S. and China, and signs of slowing global growth weighed on sentiment.

Hawkish comments from a couple of Federal Reserve officials weighed as well.

The major averages all ended in negative territory although the S&P 500 and the Nasdaq managed to spend some time above the flat line.

In addition to digesting the latest batch of earnings updates and economic data, investors looked ahead to the non-farm payroll data for the month of July, due later in the week.

The Dow ended with a loss of 402.23 points or 1.23 percent at 32,396.17, slightly off the session's low. The S&P 500, which advanced to 4,140.47, settled with a loss of 27.44 points or 0.67 percent at 4,091.19, while the Nasdq, which rebounded to 12,503.34, rising nearly 250 points from an early lower, ended with a loss of 20.22 points or 0.16 percent at 12,348.76.

Tensions between the U.S. and China have risen due to U.S. House Speaker Nancy Pelosi's visit to Taiwan.

It is feared that Pelosi's trip to Taiwan would raise tensions between the two economic superpowers. Chinese foreign ministry spokesman Zhao Lijian said that Pelosi's visit would lead to "very serious developments and consequences". The White House has warned China against turning her visit into a crisis.

Caterpillar ended nearly 6 percent down, after reporting lower than expected revenues in the latest quarter. The company reported second-quarter earnings of $1.67 billion, or $3.13 per share compared to $1.41 billion, or $2.56 per share a year ago. Revenue for the quarter rose 10.6 percent to $14.25 billion from $12.89 billion last year.

Dupont drifted down 2.7 percent, weighed down by a downward revision in the company's full-year outlook.

Uber Technologies shares soared nearly 19 percent after the company said that gross bookings reached an all-time high of $29.1 billion in the second quarter this year, up 33 percent over the corresponding quarter last year. The company reported a net loss of $2.6 billion for the second quarter. For the third quarter of this financial year, Uber expects gross bookings of $29 billion to $30 billion.

Pinterest zoomed 12.25 percent, buoyed by news about Elliott Investment Management becoming the largest shareholder of the company.

Boeing, Visa, Intel, Nike, Walgreens Boots Alliance, Verizon, JP Morgan, Home Depot, Coca-Cola, Goldman Sachs and Microsoft all ended notably lower.

Data from the Labor Department showed the number of job openings in the US fell by 605,000 from a month earlier to 10.7 million in June of 2022, the lowest in nine months and below market expectations of 11 million.

Other Markets

In overseas trading, Asian stocks fell on Tuesday as worrying manufacturing data from across the globe raised concerns over a potential recession. Chinese, Hong Kong and Taiwanese stocks led losses ahead of a possible trip by U.S. House Speaker Nancy Pelosi to Taipei as part of her Asian tour.

European stocks closed on a weak note on Tuesday as traders weighed near term prospects for the market amid concerns about slowing growth and rising rates, and largely refrained from creating fresh positions.

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