FedEx saw nearly a quarter of its market value evaporate in the stock markets in New York on Friday. In addition, the major US parcel carrier came with severely disappointing quarterly results and withdrew its full-year profit forecast.
The company is seeing a decline in the number of parcel shipments due to the deteriorating economic conditions and is going to cut costs considerably. As a result, several analysts lowered their recommendations for FedEx after the profit alarm. Competitors such as UPS and XPO Logistics also fell, losing 7 percent.
FedEx is also seen as a barometer for economic development because of its logistics activities. The warning from CEO Raj Subramaniam that the world economy is heading for a recession hit Wall Street hard. The World Bank also warned that the risk of a global recession has increased due to central bank interest rate hikes.
Shortly after opening, the Dow Jones index was down 1.3 percent at 30,565 points. The broad S&P 500 also lost 1.3 percent to 3850 points, and tech gauge Nasdaq fell 1.6 percent to 11,372 points. The indicators are therefore heading for significant weekly losses. In addition, fears that the US central bank will continue to raise interest rates sharply were fueled again this week by disappointing inflation figures in the United States.
Uber lost nearly 6 percent. The taxi and meal delivery company is investigating a security incident after a report that its network had been hacked. The hack forced Uber to shut down several internal communication and technical systems.
General Electric (minus 5 percent) was also among the losers. The chief financial officer of the maker of aircraft engines and medical equipment said at a meeting with investors that the group is still struggling to deliver products to customers on time due to ongoing supply chain problems.
International Paper saw 9 percent of its stock market value evaporate. As a result, Jefferies analysts lowered the advice for the manufacturer of paper and packaging products. The stock was also under pressure due to the FedEx profit alarm.