US equities post mixed weekly results amid Fed decision

Source :IANS
Author :IANS
Last Updated: Sun, Aug 2nd, 2020, 05:54:53hrs

New York, Aug 2 (IANS) Wall Street's major averages posted mixed results in the week as investors digested the US Federal Reserve's latest policy statement and a slew of grim economic data.

For the week ending Friday, the Dow lost 0.2 per cent, while the S&P 500 and the Nasdaq gained 1.7 per cent and 3.7 per cent, respectively, Xinhua news agency reported on Saturday.

The S&P US Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on US exchanges by total market cap, logged a weekly rise of 3 per cent.

"As we wait for a vaccine and for the market to fully recover, many investors will have to brace themselves for continued volatility," analysts at Zacks Investment Management said in a note on Saturday.

"Market volatility is challenging for just about every investor, especially with all the unknowns that come with the current pandemic," they added.

Wall Street eyed the Federal Reserve's latest economic assessment and its interest rate decision.

The US central bank on Wednesday kept its benchmark interest rate unchanged at the record-low level of near zero amid a resurgence in COVID-19 cases nationwide.

"The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term," the Fed said in a statement after concluding a two-day policy meeting, adding it decided to maintain the target range for the federal funds rate at 0-0.25 per cent.

The Fed slashed interest rates to near zero earlier this year in an effort to support the economy amid the pandemic shock.

As of Saturday afternoon, the United States has reported more than 4.5 million COVID-19 cases and over 153,000 deaths -- both figures the highest worldwide, according to a tally by Johns Hopkins University.

The United States has suffered its worst economic decline on record as the economy contracted at an annual rate of 32.9 per cent in the second quarter of the year, amid mounting COVID-19 fallout, the US Commerce Department reported Thursday.

"'As expected' is the best that can be said about second quarter GDP. It was abysmal, but at least it was not a surprise," Chris Low, chief economist at FHN Financial, said in a note.

Looking ahead, Low said "weakness is likely to linger in business investment and state and local government spending, where cuts are already in the works."

Moreover, US initial jobless claims, a rough way to gauge layoffs, came in at 1.434 million in the week ending July 25, an increase of 12,000 from the prior week's revised level, the Department of Labor said on Thursday. The previous week's level was revised up to 1.422 million.

The week also featured a big wave of earnings reports including those from Apple, Amazon, Facebook and Google-parent Alphabet.

The above four tech giants all reported after Thursday's close. Apple delivered quarterly revenue of US $59.7 billion, up by 11 per cent year on year, with quarterly earnings per diluted share of US $2.58, up by 18 per cent. The stock surged more than 10 per cent on Friday.

Facebook and Amazon reported quarterly results that beat forecasts, sending shares of each company noticeably higher on Friday.

Google-parent Alphabet also beat Wall Street in second-quarter earnings, but the company's overall revenue declined for the first time in its history. The stock struggled on Friday.

US equities advanced in the past month. The Dow rose 2.4 per cent in July, the S&P 500 climbed 5.5 per cent and the Nasdaq surged 6.8 per cent.

--IANS

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