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Dow surges nearly 600 points on Tuesday opening – September prices hit 40-year high – Goldman Sachs combining trading and investment units – Strong dollar affecting international companies – Microsoft lays off hundreds of staff
Shortly after the opening bell on Tuesday, the Dow surged 600 points, or 2 percent, led by strong earnings from blue-chip companies.
The companies showing strong profitability that exceeded Wall Street’s expectations were Goldman Sachs, Johnson & Johnson, and Lockheed Martin. Salesforce was up nearly 6%, CNN reported.
Similarly, the S&P 500 rose 2.2%, and NASDAQ rose 2.6% in early trading.
The latest data from the Bureau of Labor Statistics showed prices in September hit another 40-year high. But what was most notable from the data was that most of the worst inflation, which is higher than the current 8.2 percent CPI, is hitting consumers on expenses at home. A carton of eggs is 30.5% more expensive, natural gas has risen 33.1%, electricity has risen 15.5%, groceries are up 13%, and rent is up 7.2%, NPR reported. Women’s suits are up 10%, and men’s suits are up 9.5%.
Goldman Sachs announced a major reorganization on Tuesday to streamline its operations. The company will combine its trading and investment banking divisions into one unit, reducing the number of main operating lines from 4 to 3, CNN reported. The company will also fold its digital-focused consumer banking product, Marcus, into its wealth management business.
The strong dollar is affecting the profits of large international companies such as Apple, McDonald’s, Coca-Cola, and Procter & Gamble, all of which have significant exposure overseas, CNN reported. However, small domestic-focused US companies are not faring much better despite the dollar strength. The S&P SmallCap 600 index has plunged 22% this year, as has the Russell 2000, another index of mostly smaller companies, currently down 25%. By comparison, the S&P 500 has also seen a 25% drop.
Microsoft has reportedly laid off hundreds of staff members across multiple departments, sources told Business Insider. The sources said less than 1000 staff were laid off across divisions believed to include Xbox, the forward-looking Microsoft Strategic Missions and Technology organization, and the office of the Chief Technology Officer.
