The Wall Street Subway Station (AFP / ANGELA WEISS)
The New York Stock Exchange ended in the red after a choppy session on Wednesday, after heavy losses the previous day in reaction to rising bond prices that pushed the Nasdaq into correction territory.
According to the final results, the Dow Jones index fell by 0.96% to 35,028.65 points. The technology-heavy Nasdaq lost 1.15% to 14,340.25 points and the Standard & Poor’s 500 lost 0.97% to 4,532.76 points.
After a sharp drop on Tuesday, due to the technology sector, which is more sensitive to interest rates, indicators nonetheless started the session on a rebound.
But this momentum did not hold. On the other hand, the Nasdaq continued its decline, slipping back into correction territory, as the index lost more than 10% since its last record two months ago.
On the other hand, the Dow, where the so-called “value” classic economics stocks have more weight, also fell as investors looked to take profits.
Bond yields on 10-year US Treasuries, which rose sharply the previous day, were stable at 1.90% overnight, at 1.84%.
said Tom Cahill, chief portfolio strategist at Ventura Wealth. Management: “A lot of stocks that have done well over the past few weeks, such as food, energy and financial institutions, are losing ground.”
“We’ve been betting very hard on these stocks, but with bond yields stabilizing, we’re now seeing some profit-taking in these valuable stocks,” the analyst continued.
The good quarterly results announced by banking groups Bank of America (+0.41%) and Morgan Stanley (+1.85%) or even by consumer goods giant Procter and Gamble (+3.36%) failed to raise the mood for investors.
Bank of America posted a 30% quarterly profit, driven by its investment banking and asset management activities, as well as the good financial health of the majority of its retail banking customers.
Despite a slightly lower turnover than the previous quarter, Morgan Stanley posted a profit that was higher than analysts’ expectations.
The two banks do not appear to have suffered an increase in payroll sanctioning Goldman Sachs and JPMorgan Chase, whose results, despite everything excellent, had sanctioned Wall Street the day before and again on Wednesday. Wells Fargo fell 1.98%, JP Morgan 1.55% and Goldman Sachs 2%.
Procter and Gamble raised its growth forecast for fiscal year 2022 on the back of strong demand and higher prices.
Apart from consumer products and utilities, all sectors of Standard & Poor’s ended with losses, starting with the financial sector (-1.65%) and information technology (-1.37%).
Among the valuable stocks that paid dividends, auto groups like Ford (-7.92% to $22.45), General Motors (-4.34% to $56.24) or even Boeing (-3.12% to $217.08).
The dollar fell slightly against the euro after its sharp rise the previous day, amid fears of a more aggressive-than-expected monetary policy from the Federal Reserve to combat inflation.
The US central bank’s monetary committee meets next week and is expected to give directions on its path to raising interest rates.
On the other hand, crude oil prices continued their rally, approaching $90 a barrel of Brent, the highest level since October 2014.
On the economic data front, the rise in new housing starts to 1.702 million at an annual rate for the month of December, more than expected, which helped the indicators recover for a moment in the first part of the session.
To illustrate the correction that the Nasdaq is undergoing, stellar stocks such as Apple (-2.10% to $166.23) or Tesla (-3.38% to $995.65) fell sharply.
In the wake of its tumble in Tokyo, Sony shares tumbled 5.01% to $110.04 in New York, the day after rival Microsoft in the video game sector announced the acquisition of publisher Activision Blizzard for a record sum of nearly $69 billion.
vmt / juj / eb