However, investors reacted poorly to BHP’s confirmation to the market it had made a £31.1 billion ($60 billion) offer to acquire UK miner Anglo American. Its shares dived 4.4 per cent.
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Toll roads operator Atlas Arteria (down 3.7 per cent) and Mercury NZ (down 4.8 per cent) were among the top three large-cap decliners.
Interest rate sensitive REITs, industrials (down 1.7 per cent) and financials (down 1.1 per cent) were among the weakest sectors, with all four of the major banks trading lower.
On Wall Street, the S&P 500 Index fell 0.5 per cent, trimming gains that had so far resulted in a winning week. However, it could have been much worse, with the benchmark index down as much as 1.6 per cent earlier in the day.
The Dow Jones Industrial Average dropped 375 points, or 1 per cent, after falling as much as 700 points intraday. The Nasdaq Composite Index sank 100.99 points, or 0.64 per ent, to 15,611.76.
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Shares in Meta Platforms, the parent company of Facebook and Instagram, dropped 10.6 per cent even though it reported better profit for the latest quarter than analysts had expected.
Investors instead focused on the big investments in artificial intelligence (AI) that Meta said it would be required to make. The company also gave a revenue forecast with a midpoint that fell short of analysts’ expectations.
Expectations had been high for Meta, along with the other “Magnificent Seven” stocks that drove most of the stock market’s returns last year. They need to hit a high earnings bar to justify their stellar stock prices.
The entire US sharemarket felt the pressure of another rise in Treasury yields following disappointing data on the US economy. The report undercut a central hope that has sent the S&P 500 to a series of records this year: that the economy can avoid a deep recession and support strong profits for companies, even if high inflation takes a while to get fully under control.
But the latest report stated that the US economy’s growth slowed to a 1.6 per cent annual rate during the first three months of this year, down from 3.4 per cent at the end of 2023. That was weaker than the market had been expecting. The report also stated inflation was hotter during the three months than economists’ forecasts.
However, underneath the surface, the report may not have been as bad as initially thought. Much of the slowdown was due to a rise in imports and other factors that can swing sharply and quickly. The main engine of the economy – spending by US households – remained relatively solid.
Treasury yields climbed as traders pared bets for interest-rate cuts to rates this year. The yield on the 10-year Treasury rose to 4.7 per cent, from 4.66 per cent just before the report.
With AP
Source Agencies
