Wall Street closes lower and S&P 500 breaks streak of increases with balance sheets in focus
Nasdaq leads losses on a day of caution with results and prospects from big techs; Falls from Alphabet and Caterpillar weighed on the S&P 500.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM TIMES BRASIL · 2 MIN
Wall Street ended Thursday in the red, and the pressure was concentrated where the market looks most: big technology companies. According to Times Brasil, the Nasdaq Composite fell 1.38%, to 26,184.72 points, while the S&P 500 fell 0.3%, to 7,720.39 points. The fall in the broad index interrupted a sequence of three bull sessions.
The Dow Jones Industrial Average also closed lower, with a loss of 132.54 points (0.25%), at 52,342.56 points. The movement was more moderate in the index that brings together industrial companies and traditional sectors, but followed in the same direction as the others.
The main reason, according to Times Brasil, was the new round of corporate balance sheets. Investors adopted a cautious stance regarding the results and prospects of big techs and other sectors. During earnings season, each release acts as a thermometer for profit projections, and this tends to amplify the movements of the shares most exposed to the issue.
In the S&P 500, the fall was associated with declines in Alphabet and Caterpillar. The combination of a technology giant with an industrial company shows that caution was not restricted to a single sector, although the Nasdaq felt the blow more due to its concentration of technology companies.
For those who follow the economy behind prices, the episode reinforces a well-known lesson: in the short term, shares react to expectations, but in the medium term what sustains the price is real profit and cost discipline. Results that confirm the thesis tend to give momentum to the indices, while those that fall below expectations tend to be quickly punished.
What changes for the investor
The auction, in itself, does not change the situation of those who invest in the long term. He signals, however, that the earnings season should continue to dictate the pace of the indices in the coming sessions. For those who operate Nasdaq and technology stocks, it is worth following carefully the talks about results and prospects, because this is where caution usually translates into price. Those with concentrated exposure to a few names feel the effect of a single balance sheet more, which reinforces the importance of diversification. This material does not constitute a recommendation to buy or sell assets or price forecasts.
Automatically translated from Portuguese.
