Nikkei 225–Having hit a low for the year on Tuesday, stocks are recovering some of their losses on Wednesday. In the first minutes of trading, the S&P 500 is up 0.6%, the Nasdaq Composite is up 0.8%, and the Dow Jones Industrial Average is up 0.3%. Bank of America leads the gainers with a 3.7% rise after announcing an increase in profits of 28% from a year ago, well ahead of Wall Street’s expectations. United States Banking Corporation. Shares fell over 5% after it reported disappointing fourth-quarter results. As a result of better than expected quarterly results, Procter & Gamble is rising.
On Wednesday, global shares mostly fell in cautious trading, with the Nikkei 225 down nearly 3% following the stock market’s deepest dive in the past year. The CAC 40 index gained 0.1% to 7,138.95, while the DAX index dropped 0.3% to 15,720.91. The FTSE 100 fell 0.1% to 7,556.70. Dow Jones Industrial Average and S&P 500 futures fell 0.1%. On Wall Street, technology stocks led the decline, with the S&P 500 down 1.8%. The Nasdaq, whose stock market is heavily dominated by technology stocks, fell 2.6%, while the Dow industrials slipped 1.5%. Meanwhile, the Russell 2000 index fell 3.1%, to 2,096.23.
A rise in inflation and the newest outbreak of the pandemic has caused investors to take caution, resulting in losses in global indexes this month. Last month, consumer prices rose at their fastest pace in nearly 40 years, putting pressure on the Federal Reserve and other central banks to curb inflation. As the economy has recovered, the unemployment rate has dropped to a pandemic low of 3.9%. With that, the Fed now has more room to rein in the unprecedented support it has provided to the economy since the pandemic. By raising rates, the Federal Reserve would help stem inflation, but it would also signal the end of “easy mode” for many investors since early 2020. On heavy selling of big manufacturers such as Toyota Motor Corp., the benchmark Nikkei 225 fell 2.8% to 27,467.23, its lowest close since August.
As Microsoft seeks an edge in the fiercely competitive businesses of mobile gaming and virtual reality, Sony dropped 12.8% following the announcement Tuesday that it will pay $68.7 billion for Activision Blizzard, maker of Candy Crush and Call of Duty. Creating immersive virtual worlds for work and play will make Microsoft, maker of the Xbox gaming system, one of the world’s largest video game companies. It will also help Microsoft compete with rival companies, including Meta, formerly Facebook.
Shares of Nintendo Co., a Japanese video game company, fell just 0.2%. Activision Blizzard grew 25.9% on Tuesday. Among other Asian indices, Australia’s S&P/ASX 200 fell 1.0% to 7,332.50. South Korea’s Kospi fell 0.8% to 2,842.28. Hong Kong’s Hang Seng rose 0.1% to 24,127.85, while the Shanghai Composite fell 0.3% to 3,558.18.
On Wednesday, Bank of America, UnitedHealth, and United Airlines are scheduled to release earnings. American Airlines, Union Pacific, and Netflix report earnings on Thursday. On the New York Mercantile Exchange, benchmark U.S. crude gained 72 cents to $85.55 a barrel in electronic trading. Tuesday’s oil price reached a seven-year high of $84.83, an increase of 1.9%.
Oil prices rose 59 cents a barrel to $88.10 for Brent crude, the international benchmark. The U.S. dollar fell to 114.48 Japanese yen from 114.61 yen in currency trading. The euro rose from $1.1327 to $1.1349.