Shares declined after a broad retreat on Wall Street driven by worries over the impact of high inflation on corporate profits and consumer spending.
TOKYO -- Shares declined in Europe and Asia on Thursday after a broad retreat on Wall Street triggered by worries over the impact of persistent high inflation on corporate profits and consumer spending.
Germany's DAX lost 2% to 13,731.64 and the CAC 40 in Paris declined 1.9% to 6,234.78. Britain's FTSE 100 shed 1.7% to 3,537.99. The future for the S&P 500 was 1% lower while the future for the Dow Jones Industrial Average sank 0.9%. The Dow industrials sank more than 1,100 points, or 3.6% on Wednesday, and the S&P 500 had its biggest drop in nearly two years, shedding 4%. That was its steepest decline since June 2020. The tech-heavy Nasdaq fell 4.7%. The benchmark index is now down more than 18% from the record high it reached at the beginning of the year. That's just shy of the 20% decline that's considered a bear market. "The sentiment in the market is highly negative as traders and investors are largely concerned about an economic downturn and soaring inflation," Naeem Aslam of Avatrade said in a commentary. The Federal Reserve is trying to temper the impact from the highest inflation in four decades by raising interest rates. Many other central banks are on a similar track. But the Bank of Japan has stuck to its low interest rate policy and the gap between those benchmark rates of the world's largest and third-largest economies has pushed the dollar's value up against the Japanese yen. Japan reported a trade deficit for April as its imports ballooned 28%. The shift reflects surging energy costs amid the war in Ukraine and a weakening of the yen against the U.S. dollar. Japan's exports grew to 8.076 trillion yen last month, up 12.5% from the previous year, according to Ministry of Finance data released Thursday. Imports totaled 8.915 trillion yen in April, up from 6.953 trillion yen in April 2021, and the highest since comparable numbers began to be taken in 1979. The Nikkei 225 in Tokyo lost 1.9% to 26,402.84 and the Hang Seng in Hong Kong dropped 2.5% to 20,120.60. In South Korea, the Kospi shed 1.3% to 2,592.34, while Australia's S&P/ASX 200 gave up 1.7% to 7,064.50.On Wednesday, retailer Target lost a quarter of its value after reporting earnings that fell far short of analysts' forecasts. Inflation, especially for shipping costs, dragged its operating margin for the first quarter to 5.3%. It had been expecting 8% or higher. The company warned that its costs for freight this year would be $1 billion higher than it estimated just three months ago. The report comes a day after Walmart said its profit took a hit from higher costs. The nation's largest retailer fell 6.8%, adding to its losses from Tuesday. Target and Walmart each provided anecdotal evidence that inflation is weighing on consumers, saying they held back on purchasing big-ticket items and changed from national brands to less expensive store brands. The weak reports stoked concerns that stubbornly rising inflation is putting a tighter squeeze on a wide range of businesses and could cut deeper into their profits.The data are not entirely consistent. On Tuesday, the market cheered an encouraging report from the Commerce Department that showed retail sales rose in April, driven by higher sales of cars, electronics, and more spending at restaurants. Investors worry the Fed could trigger a recession if it raises interest rates too high or too quickly. Worries persist about global growth as Russia's invasion of Ukraine puts even more pressure on prices for oil and food while lockdowns in China to stem COVID-19 cases worsens supply chain problems. In other trading, benchmark U.S. crude oil rose 56 cents to $110.15 per barrel in electronic trading on the New York Mercantile Exchange. It dropped $2.81 to $109.59 on Wednesday.The dollar fell to 128.14 Japanese yen from 128.20 yen late Wednesday. The euro strengthened to $1.0481 from $1.0464.
Please follow us on Google to support usUnited States Latest News, United States Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
'Modern Caribbean Restaurant St. James Opens Today' on 14th Streetphoto courtesy Melena DeFlorimonte From a press release: 'Jeanine Prime is proud to announce the long-awaited opening of St. James, a modern Caribbean
Read more »
Modern Caribbean Restaurant St. James Breezes Onto 14th StreetHighly anticipated Caribbean restaurant St. James is opening tonight on 14th Street.
Read more »
Wall Street ends sharply higher, fueled by AppleWall Street finished sharply higher on Tuesday, lifted by Apple, Tesla and other megacap growth stocks after strong retail sales in April eased worries about slowing economic growth.
Read more »
Flight data suggests China Eastern plane deliberately crashed: Wall Street Journal reportBlack box data recovered from a China Eastern flight that crashed in March suggests someone in the cockpit intentionally downed the plane, the Wall Street Journal reported, citing a preliminary assessment from United States officials.
Read more »
GBP/JPY sinks as Wall Street sells off following Target's worst day since Black Monday 1987At 158.20, BP/JPY is down some 2% at the time of writing as risk appetite fades due to concerns about the outlook for global economic growth and risin
Read more »
Asia-Pacific stocks set for lower start following tumble on Wall StreetMajor indexes on Wall Street declined more than 3.5% overnight, with the Dow Jones Industrial Average closing at its lowest since March 2021.
Read more »