Futures contracts fall despite strong performance by US companies

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Wall Street fell ahead of the opening bell despite strong earnings at some major U.S. corporations on Tuesday.

Dow Jones Industrials futures fell 0.4% and S&P 500 futures fell 0.3%.

General Motors jumped 4.4% after the automaker reported third-quarter net profit rose 36.7% as vehicle sales rebounded from global parts supply chain issues. U.S. vehicle sales jumped 24%.

Shares of Coca-Cola soared nearly 3% after the beverage giant posted stronger-than-expected sales in the third quarter as it raised prices. It also raised its revenue forecast for the year.

Google’s parent company, along with Facebook’s parent company Amazon and Apple, all released their latest financial results this week. They are among the most expensive stocks in the benchmark S&P 500 and their earnings this week could spell big moves, up or down, for the broader market.

Investors are looking for indications of the impact of inflation on various industries. Prices for everything from clothes to food remain at four-decade highs, prompting companies to raise prices and cut costs, while squeezing consumers.

The Federal Reserve and central banks around the world have raised interest rates to keep inflation under control, and those increases have weighed on more expensive stocks, like tech companies, by making lower-risk bonds more attractive in a stock market. volatile.

The Fed is expected to raise interest rates by three-quarters of a percentage point at its next meeting in November.

Economists and investors fear that central banks could go too far in slowing economic activity, triggering a recession. They are looking for any signs that they might ease rate increases. The US economy has already slowed, contracting in the first half of the year.

A report on US consumer confidence is due Tuesday morning. The US government will release its third quarter gross domestic product report on Thursday.

In midday Europe, London’s FTSE 100 fell 0.6% as Britain’s third prime minister this year, Rishi Sunak, prepared to take office and appoint a cabinet to deal with economic and political crises. from the United Kingdom.

The German DAX fell 0.8% on the release of a better than expected but overall dismal German business climate report. The CAC in Paris rose by 0.4%.

In Asia, markets remained jittery over the outcome of a Communist Party congress in China, where key reformers were barred from the highest levels of ruling party leadership. Hong Kong’s benchmark index edged down 0.1% to 15,165.59, failing to hold onto early gains after a 6.4% selloff the previous day. The Shanghai Composite Index fell less than 0.1% to 2,976.28.

Chinese stocks languished after the Communist Party Congress granted leader Xi Jinping an unprecedented third five-year term and installed key Xi allies as top ruling party leaders, defeating officials seen as pro-government reformers. market.

Xi wants a bigger role for the Communist Party in China’s trade and technology development, raising fears that centralized control could hold back an already slowing economy.

But that might not mean major policy changes, said ING’s Iris Pang.

Indeed, “most, if not all, of the existing policy decisions have been agreed with Xi. This applies to potential changes in the central bank governor, banking regulator and economic adviser.

The Chinese yuan fell to a 15-year low of 7.3089 to the US dollar after China’s central bank appeared to ease in trying to counter market forces that were pushing the tightly controlled currency lower. The yuan fell as interest rate hikes in the United States encouraged banks and other traders to convert cash into dollars in search of higher yields.

In September, Chinese commercial banks were ordered by the People’s Bank of China to keep the exchange rate stable and not bet on a weakening yuan. But after the ruling party’s congress ended at the weekend, the central bank set the yuan’s starting price for trading on Tuesday at an unusually low level.

Elsewhere in Asia, Tokyo’s Nikkei 225 rose 1% to 27,250.28, while Seoul’s Kospi fell 0.1% to 2,235.07. Australia’s S&P/ASX 200 gained 0.3% to 6,798.60. India’s Sensex slid 0.5%, while Taiwan’s benchmark lost 1.5%.

In other trading, the dollar fell to 148.91 Japanese yen from 148.94 yen. The euro fell to 98.64 cents from 98.75 cents.

Benchmark U.S. crude oil fell $1.25 to $83.33 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international price standard, fell $1.19 to $90.02 a barrel.

On Wall Street on Monday, stocks extended their gains from a week ago as investors braced for a week of heavy earnings from big tech companies.

The S&P 500 rose 1.2%. The Dow Jones Industrial Average rose 1.3% and the tech-heavy Nasdaq composite closed up 0.9%. The Russell 2000 Index climbed 0.4%.

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Kurtenbach reported from Bangkok; Ott reported from Washington. AP Business Writer Joe McDonald in Beijing contributed.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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