FedEx warning hits US market, FTSE 100 lower
A profits warning by FedEx after last night’s closing bell in New York means traders are braced for a weak session when Wall Street reopens later.
FedEx shares slumped almost 17% in after-hours trading as the Memphis-based packages delivery company withdrew full-year results guidance issued at the end of June.
The move, which has been accompanied by an acceleration in cost reduction initiatives, came as it reported a 21% fall in earnings for the first quarter of its financial year to 31 August.
Chief executive Raj Subramaniam said: “Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the US.
“We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations.”
The Dow Jones Industrial Average lost 0.6% and the S&P 500 fell 1.1% yesterday as expectations for another 0.75% rise in US interest rates were reinforced by stronger-than-expected retail sales and jobless claims figures.
Futures markets are pointing to another decline at the end of what’s been a disappointing week for US investors. In the UK, CMC Markets expects the FTSE 100 index to follow yesterday’s flat performance by opening 40 points lower at 7242.
Rate rise expectations in the US have left the pound back near to its 37-year low of just above $1.14. Oil prices weakened yesterday to leave Brent crude at $91 a barrel.