© Reuters
By Yasin Ebrahim
Investing.com — The Dow closed lower Thursday, after cutting intraday gains as an ongoing slip in Alphabet and fresh warnings on the economy from the bond market weighed on investor sentiment.
The fell 0.73%, or 249 points, the was down 1.02%. The fell 0.85%.
The inverted by 85 basis points, the deepest inversion since early 1980s, triggering fresh worries about economic troubles just as investors price in a more hawkish Federal Reserve.
Worries about a recession have been belied by a strong labor market, though following data, released Thursday, that surprised to the upside, some suggest the recent surge in layoffs will start to push claims higher later this year.
“The bigger picture here, though, is that the surge in layoff announcements reported in the Challenger survey will pass through into claims by late winter/early spring, allowing for the usual lags,” Pantheon Macroeconomics said.
Alphabet (NASDAQ:) was one of the biggest drags on the broader market as the fallout from its underwhelming event on Wednesday when it unveiled its AI chatbot ‘Bard’ continued.
“We think the ‘Google Live from Paris’ event was disappointing,” UBS said, adding that the company “failed to directly respond to Microsoft’s integration of ChatGPT into Bing search yesterday.”
“Much of what was discussed was elaborating on previously announced products, like Google Lens, Translate, and Multisearch, with less incremental updates than what we were expecting,” it added.
Financials also weighed on the market, pressured by a dip in bank stocks as an inverted yield curve, in which short rates are higher than longer rates, tends to keep a lid on bank lending margins’ profitability.
Bank of America Corp (NYSE:), First Republic Bank (NYSE:) and Citigroup Inc (NYSE:) led losses in financials, while Willis Towers Watson PLC (NASDAQ:) also added pressure despite reporting better-than-expected .
A rally in casino stocks following better-than-expected quarterly results from Wynn Resorts Limited (NASDAQ:) and MGM Resorts International (NYSE:) kept consumer stocks above the flatline.
Walt Disney Company (NYSE:), meanwhile, reversed gains to end lower after the entertainment company reported quarterly results that Wall Street estimates.
The company also announced a restructuring plan that will include 7,000 job cuts as part of a plan to consolidate its meta assets into three businesses that could result in about $5.5 billion in cost savings.
The cost-saving measures appeared to appease activist investor Nelson Peltz, who said he would end his proxy battle for a board seat.
“The proxy fight is over. This is a win for all shareholders,” a spokesperson for Peltz’s Trian Fund Management said, according to Reuters.
Affirm Holdings Inc (NASDAQ:), meanwhile, was punished after its fiscal second-quarter fell short of analyst estimates and the buy now pay later firm said it would cut about 19% of its workforce.
