It was a sluggish start to 2023 for Wall Street as concerns around rising interest rates and pressures on the tech sector continued to weigh on US stocks.
Signs the jobs market remains pretty tight knocked sentiment as investors assumed this would mean rates staying higher for longer. Apple (AAPL:NASDAQ) was among several tech stocks to endure a tough start to the year - not helped by weak results from fellow consumer electronics play Samsung (005930:KRX) and fears over its Chinese exposure.
Entertainment business Warner Bros Discovery (WBD:NASDAQ) made strong progress as analysts responded positively to hints the company was done with the restructuring process which dominated 2022.
A move lower in General Electric (GE:NYSE) shares reflected the impact of the spin-off of its health care business which completed on 4 January.
Alcoholic drinks maker Constellation Brands (STZ:NYSE) fell as higher costs saw it rack up losses in its fiscal third quarter.
TESLA
Electric vehicle maker Tesla (TSLA:NASDAQ) started 2023 in decidedly mixed form. Released on 2 January deliveries for the fourth quarter came in at 405,278 vehicles, up 40% year-on-year and the first time it has ever handed over more than 400,000 units to customers in a single quarter. Yet deliveries still missed analyst estimates which ranged from 418,000 to 427,000.
The news put renewed pressure on a share price which has already been hit by fears of mounting competition and the impact of a weakening economy on demand - with waiting lists for Tesla vehicles starting to come down. There is also continuing concern over the distraction provided by founder and chief executive Elon Musk's role at newly acquired social media platform Twitter.
In the first few trading days of 2023 Tesla shares are down around 10%, having slumped by more than two thirds across the course of 2022 as a whole.
AMAZON
Online retail and internet services giant Amazon (AMZN:NASDAQ) shocked the market with news it was laying off 18,000 people in the biggest round of redundancies in the company's history.
The job losses will mainly impact the company's human resources arm as well as Amazon Fresh and Amazon Go, and mark a big increase from the 10,000 job losses mooted as recently as November.
Chief executive Andy Jassy said the firm had hired too rapidly over the last several years and that annual planning had become ‘more difficult given the uncertain economy’.
Compounding the gloom around the outlook for tech firms, cloud-based software company Salesforce.com (CRM:NYSE) said it planned to cut its workforce by 10% and close some of its offices as it faced into the economic slowdown.
WESTERN DIGITAL
Memory chip manufacturer Western Digital (WDC:NASDAQ) saw its shares jump 10% after Bloomberg reported the company has restarted merger talks with Japan's Kioxia Holdings.
The two companies jointly operate a flash memory chip plant in Japan. Kioxia was spun out of electronics giant Toshiba (6502:TYO) and was formerly known as Toshiba Memory. The company is the world's second largest maker of NAND flash memory chips.
In June 2022 Western Digital said it was considering strategic alternatives including spinning-off its flash memory and disk-drive businesses. This followed pressure from activist investor Elliott Management which disclosed a stake in May.
Prior talks around the potential $20 billion merger had come to a halt after disagreements over valuations and concerns over regulatory approvals, according to a Reuters report in October 2021.
Positive sentiment spilled over into the wider chip sector with shares in memory chip giant Micron Technology (MU:NASDAQ) gaining around 8%.
