Daily Stocks Update: Microsoft, Alphabet Miss Earnings Estimates – Apr 22, 2016

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US stock indices closed the day lower, as earnings reports from top companies missed expectations. The Dow 30 index fell 113.75 points to 17,982.52 (-0.63%), the S&P 500 index slipped 10.92 points to 2,091.48 (-0.52%) and the Nasdaq was down 2.24 points to 4,945.89 (-0.05%). The S&P 500 VIX, which is considered a gauge of market uncertainty, ticked up 0.67 points to 13.95 (+5.05%).

Microsoft reported weaker than expected earnings per share of 62 cents versus analysts’ expectations of 64 cents. Net income fell from $4.99 billion to $3.76 billion while adjusted revenue also fell short at $22.08 billion. Meanwhile, Google’s parent company Alphabet also printed downbeat results, as rising mobile traffic costs spurred by a strong dollar weighed mostly on profitability.

Investors might also be paring their holdings to reduce their exposure to next week’s FOMC interest rate statement. No actual monetary policy changes are expected but the Fed might issue a less upbeat assessment, especially since CPI and retail sales figures have fallen short of expectations in March. Also, market watchers seem wary about a potential surprise announcement after the Fed had a special closed meeting last week.

European markets end mixed after ECB

The European Central Bank’s decision to stay on hold triggered a lot of volatility in the European markets, as policymakers didn’t seem too bothered by the currency’s strength lately. While Draghi acknowledged improvements in global financial conditions and how their policy efforts are taking effect, he also admitted that inflation could stay low for a long time and might even turn negative.

The German DAX closed 14.44 points up to 10,435.73 (+0.14%), the French CAC 40 slipped 9.09 points down to 4,582.83 (-0.20%), and the Euro Stoxx 50 index was 14.34 points higher to 3,156.86 (+0.46%).

Meanwhile, the London FTSE ended 28.82 points lower to 6,381.44 (-0.45%) after the UK retail sales report printed a large 1.3% slump in consumer spending versus the estimated 0.1% decline. In addition, the previous figure was downgraded to show a larger drop of 0.5% from the initially reported 0.4% fall.

Asian markets mixed on weaker commodities

Crude oil capped off its positive streak for the week after Libya announced its plans to double its production upon the formation of a new government. WTI crude oil is down to $43.81/barrel and Brent crude oil is down to $45.12/barrel.

The Nikkei is up 73.55 points to 17,441.42 (+0.45%), the S&P ASX 200 is down 19.11 points to 5,253.60 (-0.36%), and the China A50 index is up 16.85 points to 9,614.98 (+0.18%).

 

 

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.