MARKET REVIEW. The New York Stock Exchange closed lower on Tuesday, weighed down by the semiconductor and technology sectors as investors took positions ahead of US inflation on Wednesday.
The Toronto Stock Exchange lost more than 90 points due to losses in the technology sector.
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Stock indices at closing
In Toronto, the S&P/TSX it fell 90.87 points (-0.46%) to 19,578.30 points.
In New York, the S&P500 it fell 17.59 points (-0.42%) to 4,122.47 points.
the nasdaq it fell 150.53 points (-1.19%) to 12,493.93 points.
the DOW it fell 58.13 points (-0.18%) to 32,774.41 points.
the loon closed down US$0.0018 (-0.2312%) at US$0.7758.
the oil closed down US$0.28 (-0.31%) at US$90.48.
L’Prayed it rose $5.40 (+0.30%) to $1,810.60.
the bitcoin it fell US$882.57 (-3.67%) to US$23,169.31.
Even as President Joe Biden signed legislation to support more than $50 billion in investment in the semiconductor sector, he darkened the session after several doomsday warnings about immediate demand for electronic components.
micron technology (UM, US$59.15, -3.74%) warned that its quarterly revenue could fall short of its forecast. The group expects a drop in customer demand for souvenirs due to economic uncertainties, while supply difficulties are disrupting companies’ inventory management.
The eve, nvidia (NVDA, $170.86, -3.97%)another semiconductor maker specializing in graphics cards, also warned that its second quarter would see a “major slowdown on the gaming side.”
These two announcements dragged the entire sector,AMD ($95.54, -4.53%) a Qualcomm (QCOM, US$142.51, -3.59%) going Intel (INTC, US$34.52, -2.43%) and even Amazon (AMZN, US$137.83, -1.13%)a big name in the cloud, dematerialized computing and a big consumer of microprocessors.
“The law on potato chips [puces] that we knew the president was going to sign was already made up of the market,” Tom Cahill, of Ventura Wealth Management, explained to AFP. “It was the warnings from Micron and Nvidia that counted.”
“It seems that the technology sector, like the rest of the economy, is slowing down,” said the analyst, recalling that during the pandemic the demand for technological equipment had increased greatly with teleworking, a boost that is now running out. .
Another major player in video games, the American publisher Interactive Take-Two (Grand Theft Auto), which bought mobile game developer Zynga at a high price earlier this year, has clearly faltered (TDOS, $120.76, -3.78%) after announcing results well below forecasts for its first quarter.
According to analyst firm Games Market Dynamics, consumer spending on video games fell 12% in the second quarter of 2022, compared to a year ago.
Investor anxiety over the release of inflation figures on Wednesday for the CPI consumer price index, on Thursday for producer prices and on Friday for the consumer confidence index also dampened the momentum of recent weeks.
Since the June lows, “the Nasdaq is up nearly 20% and the S&P 500 is up 15%,” recalled Tom Cahill. “I think today was an opportunity to position ourselves and take profits ahead of the inflation data,” he added.
Same story with Wells Fargo analysts who noted “caution among investors awaiting the price index that could well determine the Fed’s monetary path. [Fed]”.
The title of the developer of a vaccine against COVID-19, Novavax (NVAX), listed on the Nasdaq, plunged 29.64% to $40.28. The group announced, Monday after the close, greatly reduced sales prospects for 2022 due to disappointing demand for its vaccine.
Novavax posted a $510 million loss in the second quarter, compared to a $352 million deficit a year earlier.
While investors are wondering about the consumer’s health in the face of price increases, several online sellers have had a drink, from caravan (cars) (NRVC, $41.43)which lost 10.83%, to fair way (Furniture) (M, $59.61)which fell 17.04%.
In the bond market, two-year rates remained well above ten-year rates at 2.77%.
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