While you were sleeping: Intel, Southwest slide

While you were sleeping: Intel, Southwest slide

July 22 (BusinessDesk) - Wall Street fell, weighed down by shares of Intel and Southwest Airlines following disappointing earnings.

Shares of Southwest Airlines sank, trading 11.1 percent lower as of 3.12pm in New York, after its latest quarterly results bolstered concern about its fares. Shares of other airlines followed suit.

“While solid traffic demand has continued into July, thus far, the fare environment remains challenging, and close-in yields have softened in recent weeks," Southwest CEO Gary Kelly said in a statement.

In 3pm trading in New York, the Dow Jones Industrial Average slid 0.6 percent, while the Nasdaq Composite Index declined 0.5 percent. In 2.45pm trading, the Standard & Poor’s 500 Index retreated 0.5 percent.

A drop in Intel shares, last down 4.9 percent, led the slide of the Dow. Pacing the decline were shares of American Express and those of Nike, down 1.9 percent and 1.4 percent respectively.

While Intel's latest earnings disappointed investors, rival Qualcomm surprised with better-than-expected results. Qualcomm shares rose 7.2 percent as of 3.17pm.

The latest US housing data were better than expected. Total existing-home sales climbed 1.1 percent to a seasonally adjusted annual rate of 5.57 million in June from a downwardly revised 5.51 million in May, the National Association of Realtors said.

“Sustained job growth as well as this year's descent in mortgage rates is undoubtedly driving the appetite for home purchases,” Lawrence Yun, NAR chief economist, said in a statement. “Looking ahead, it's unclear if this current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing.”

Even so, the US economy appears in good shape.

"The economy is doing well and is weathering the global turbulence,” Thomas Costerg, a US economist at Standard Chartered Bank in New York, told Reuters. “With housing and consumers powering ahead, some of the clouds are dissipating and summer looks good from a data point of view.”

The European Central Bank's Governing Council kept, as had been expected, its key interest rate steady in its first policy meeting since the UK's vote to exit the European Union. President Mario Draghi flagged that the central bank might add fresh stimulus later this year, if needed.

“If warranted to achieve its objective, the Governing Council will act by using all instruments available within its mandate,” Draghi told reporters in Frankfurt, according to Bloomberg. “I would stress readiness, willingness, ability, to do so.”

Europe’s Stoxx 600 Index finished the day with a decline of just under 0.1 percent from the previous close. France’s CAC 40 index slipped 0.1 percent, while the UK’s FTSE 100 index fell 0.4 percent. Germany’s DAX index gained 0.1 percent.

“Now it’s all about about holding on, not panicking and reassessing fundamentals. Company earnings could give us some direction here,"Patrick Moonen, a multi-asset strategist at NN Investment Partners, told Bloomberg. "But we’re all waiting for data that shows us whether economic growth will be affected by Brexit, and whether central banks really need to do more.”

(BusinessDesk)

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