“We’ll be looking to see how serious is this and does it look like it’s going to be sustained. And if it is, it could easily have a significant macroeconomic effect,” said Powell.
The Dow Jones Industrial Average was down 1.63 per cent to 32,030.11 points; S&P 500 fell 1.65 per cent to 3936.97; and Nasdaq Composite declined 1.6 per cent to 11,669.96.
Across the Tasman, the S&P/ASX 200 Index had fallen 0.61 per cent to 6972.5 points at 6pm NZ time.
Matt Goodson, managing director of Salt Funds Management, said it hasn’t been a great month, but the local market closing just ahead compared with a 1.6 per cent fall in the US is a solid effort.
“The Federal Reserve is trying to thread the needle by maintaining quantitative tightening while at the same providing liquidity. I hope they succeed.”
At home, The Warehouse Group tumbled 28c or 11.67 per cent to $2.12 after reporting a 60.9 per cent fall in net profit to $17.36m on revenue of $1.81 billion, up 4.8 per cent, for the six months ending January, with a slowdown in the second quarter. The retailer is not paying an interim dividend.
The Warehouse told the market that the cost of doing business increased 3.5 per cent and it expects trading will continue to be challenging for the remainder of the financial year. It is cutting 340 jobs at the Auckland Store Support Office.
Noel Leeming and Torpedo7 sales decreased, while The Warehouse and Warehouse Stationery were up 13.2 per cent and 1.7 per cent respectively.
Goodson said it was a poor half-year result. “You will see a round of downgrades from analysts, and The Warehouse really needs to cut costs. The gross profit margin is getting uncomfortably close to the cost of doing business.
“The market will start focusing on the state of its balance sheet and The Warehouse may need to review some of its unprofitable businesses, such as online and Torpedo7,” he said.
Other retailers Briscoe Group was down 7c to $4.49; Hallenstein Glasson declined 7c to $5.32; and KMD Brands was up 2c or 1.98 per cent to $1.03.
The property sector fell 1.46 per cent. Goodman Trust declined 5c or 2.42 per cent to $2.015; Investore was down 3c or 2.11 per cent to $1.39; Argosy decreased 2c or 1.82 per cent to $1.08; Property for Industry shed 3c to $2.20.
Among the leading stocks, Fisher and Paykel Healthcare was up 23c to $25.98; Mainfreight climbed $1.70 or 2.51 per cent to $69.50; Infratil gained 18c or 2.09 per cent to $8.80; and Port of Tauranga added 15c or 2.46 per cent to $6.25.
Mercury Energy decreased 7c to $6.01; Contact was down 6c to $7.33; a2 Milk shed 10c to $6.29; and Summerset Group declined 10c to $8.55.
Other gainers were Serko up 8c or 3.64 per cent to $2.28; Tourism Holdings adding 6c to $3.88; Embark Education up 3c or 5.56 per cent to 57c; NZ Oil & Gas improving 1.5c or 3.9 per cent to 40c; and TradeWindow adding 1.5c or 4.76 per cent to 33c.
Synlait Milk was down 5c or 2.05 per cent to $2.39 following the resignation of its director of operation Nigel Macdonald who leaves at the end of May. Goodson said the market was concerned over whether the resignation would impact the China re-registration process.
Westpac declined 48c or 2.04 per cent to $23; Heartland Group fell 7c or 4.46 per cent to $1.50; Restaurant Brands was down 12c or 1.85 per cent to $6.38; Vulcan Steel shed 24c or 2.92 per cent to $7.98; and My Food Bag decreased 1.5c or 6.12 per cent to 23c.
Other decliners were Bremworth falling 3.5c or 10 per cent 31.5c; Allied Farmers shedding 2c or 2.7 per cent to 72c; and Accordant Group down 5c or 2.94 per cent to $1.65.
Eroad was up 3c or 4 per cent to 78c. Long-time director Tony Gibson, formerly Ports of Auckland chief executive, is stepping down from the Eroad board at the next annual meeting.
Software company Blackpearl Group, unchanged at 38c, is introducing a new product to the US market. The product provides businesses unique visibility into their website visitors.
