Business

US stocks fall after deluge of mixed earnings

Wednesday, October 23, 2019

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NEW YORK, United States (AFP) — Wall Street stocks finished lower on yesterday, with tech companies especially weak, following mixed corporate earnings that boosted Procter & Gamble and pummeled McDonald's.

After a mostly positive set of results in the initial earnings period, Tuesday's spate of releases had both winners and losers.

“With earnings continuing to come out, we're seeing additional weakness,” said Sam Stovall of CFRA Research, who noted that stocks had risen in the period leading into earnings season.

The Dow Jones Industrial Average finished 0.2 per cent lower at 26,788.10.

The broad-based S&P 500 fell 0.4 per cent to 2,995.99, while the Nasdaq dropped 0.7 per cent to 8,104.30.

Technology companies with especially big drops included Netflix, which fell 4.1 per cent and Facebook, which shed 3.9 per cent after New York Attorney General Letitia James announced that she and 46 other attorneys general are now pursuing an antitrust probe of the company.

In the closely-watched Brexit developments, British MPs gave their initial approval to legislation enacting Prime Minister Boris Johnson's EU divorce deal — but rejected his plan to rush it through parliament, opening the door for yet another Brexit delay.

Stovall said he was broadly encouraged by the Brexit developments “because we're coming to some sort of conclusion.”

In earnings news, Procter & Gamble jumped 2.6 per cent as it lifted full-year targets following better-than-expected earnings on strong sales of premium products and higher overall pricing.

But fellow Dow member McDonald's slumped 5.0 per cent as its third-quarter earnings missed expectations due in part to heavy spending on technology. The company's US sales also lagged expectations.

Biotech company Biogen surged 26.1 per cent after it announced it will seek regulatory approval from the Food and Drug Administration for aducanumab, an investigational treatment for early Alzheimer's disease.

Under Armour gained 6.9 per cent as it announced that company founder Kevin Plank was stepping down as chief executive and will be replaced by president Patrik Frisk. Plank will continue to be chairman of the company.

And toymaker Hasbro plunged 16.8 per cent after reporting a 19.2 per cent drop in third-quarter profits to US$212.9 million due in part to tariff-related costs.


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