The Daily Times Newspaper

Wall Street Chews on Fed Rate Decision, Tesla Down After Numbers

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Tesla fell sharply on the stock exchanges in New York on Thursday. Investors were disappointed with the results of the electric vehicle maker, despite closing the last quarter of 2021 with a record profit of $2.3 billion.

 

In addition, the markets were still chewing on the Federal Reserve’s interest rate decision. The central bank kept interest rates unchanged on Wednesday but gave a clear signal for a hike in March. It would be the first-rate hike in the US since December 2018.

Tesla lost 4 percent. The car manufacturer owes its strong growth, among other things, to a factory that has been put into operation in China, where it can produce its vehicles more cheaply. But according to Tesla, the numbers could have been even better. Like other car manufacturers, the company is struggling with shortages of parts and chips. According to Tesla, that is the main limiting factor in production. Moreover, the car manufacturer expects the problems to continue for the foreseeable future.

Shortly after opening, the Dow-Jones index was 1.6 percent higher at 34,730 points. The broad S&P 500 rose 1.7 percent to 4423 points, and tech gauge Nasdaq gained 1.5 percent to 13,741 points. Before the start of stock exchange trading, it was also announced that the US economy grew faster in the fourth quarter than economists had widely expected.

Intel lost nearly 7 percent. In addition, the chip manufacturer saw its profits decline in the fourth quarter and expects profit margins to remain under further pressure in the coming period. All this has to do with the major investments the company is facing to increase chip capacity.

McDonald’s further lost more than 1 percent. The fast-food chain made less profit than expected last quarter due to higher costs. The group spent more on labour costs to retain and attract employees and struggled with increased food prices. Levi Strauss also gained just under 14 percent thanks to strong demand for the clothing brand’s jeans and jackets.

Netflix, in turn, climbed nearly 6 percent after news that stock billionaire Bill Ackman’s Pershing Square hedge fund has bought more than 3 million shares of the video streaming company. Netflix lost a lot of market value last week due to disappointing subscriber growth.

The euro was worth USD 1.1160, compared to USD 1.1280 a day earlier. A barrel of US oil costs 0.8 percent more at $88.08. Brent oil became 0.7 percent more expensive at $ 90.61 a barrel.

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