THE GIST (“THE WHAT”)
Gapping down at the open, the index struggled to find direction, trading within a tight range on a low volume day ahead of key inflation reading tomorrow, closing at 4119.18, down 18.95 points (-0.46%). Debt ceiling standoff also weighed down on investor sentiment.
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THE DETAILS (The “How & Why”):
Fear of global recession were reignited after Chinese imports plunged 7.9% year-on-year, suggesting that the Chinese recovery story has faded. Markets are now keenly waiting for the U.S. April consumer prices and producer prices reports to gauge if the Fed’s monetary tightening policy has been successful in taming down the sticky inflation that continues to remain its prime concern.
Mixed earnings did little to boost sentiment today. Paypal Holding Inc. tumbled 12.73% on analyst downgrade after the payment processing company warned of declining operating earnings.
Regional bank stocks also continued to be sold off amid growing liquidity conditions. Bucking the trend, however, DaVita Inc. rallied 12.90% after the healthcare company reported a surprise jump in its quarterly earnings of 46.30% and raised its financial guidance.