Microsoft on the up: Bank worries weigh on Wall Street

Microsoft on the rise
Bank worries burden Wall Street

04/26/2023, 11:01 p.m

Surprisingly strong quarterly earnings from Microsoft gave the tech-heavy Nasdaq a slight boost on Wednesday. In the banking sector, on the other hand, there is a lot of rumblings going on, and otherwise the mood for standard stocks is rather depressed.

Solid business figures from large corporations supported the US stock exchanges on Wednesday. On the other hand, the ongoing fall in the price of the First Republic Bank caused nervousness, fueling concerns about the stability of the US banking sector. The leading US index Dow Jones lost 0.7 percent to 33,301 points. The broad one S&P 500 lost 0.4 percent to 4055 points. The tech-heavy one Nasdaq increased by 0.5 percent to 11,854 jobs.

Had continued high demand for cloud offerings Microsoft brought surprisingly strong quarterly results and drove the shares by 7.2 percent to their highest level in twelve months. The mega takeover of the video game maker Activision is blocked by the British antitrust authorities. Activision shares fell 11.4 percent. The business figures of the Facebook parent company Meta were expected after the US stock market closed.

could shine Boeing with an increase in sales, which boosted the planemaker’s shares by as much as 3.8 percent. In the end, an increase of 0.4 percent remained. Also Visa earned more than expected in the quarter. Earnings forecasts for S&P 500 companies have improved overall. Analysts are expecting first-quarter earnings to fall by 3.9 percent on average, compared to an estimate of a 5.2 percent decline earlier in the earnings season. But declining consumer confidence is raising concerns about impending lower spending, said Susannah Streeter, Hargreaves Lansdown’s money and markets manager.

In the financial sector, the trembling was about the ailing regional bank First Republic further. Shares fell amid sharply falling deposits by another 30 percent to $5.69. In the meantime they had dropped to $4.77. The market value fell below the one billion dollar mark for the first time. According to the TV broadcaster CNBC, the US government is not ready to help the lender. The bank itself is evaluating several options, such as selling assets or creating a bad bank, an insider told Reuters.

The Dollar however, has come under pressure following recent gains. The dollar index, which measures the value of the greenback against other major currencies, fell 0.3 percent to 101.46 points. The Euro in turn, gained 0.6 percent to $1.1036.

The dispute over raising the debt ceiling in the US made investors on the futures markets increasingly nervous. The cost of insuring against a US default rose to its highest level since 2011. Insuring a $10 million package of US bonds against default rose to $62,000, according to data from S&P Global Market Intelligence. This is more than double the level at the beginning of the year.