New York (AFP) – The New York Stock Exchange was down on Tuesday, still deprived of breath after a gloomy week and a long weekend, handicapped by the rise in bond rates and the energy crisis in Europe.
Around 2:20 p.m. GMT, the Dow Jones lost 0.63%, the Nasdaq index 1.13% and the broader S&P 500 index, 0.72%. Wall Street was closed on Monday, a public holiday in the United States (Labor Day).
After opening in positive, the Nasdaq quickly ran out of steam and threatened to record a seventh consecutive session in the red. It was quickly followed by the two other major Wall Street indices, which also went into negative.
The semblance of momentum at the start of the session was “essentially due to the feeling that the time for a jump had come after a wave of declines”, according to Patrick O’Hare of Briefing.com.
“It’s not a real rebound, or even not a rebound at all,” said Karl Haeling of LBBW bank. “Most of the attention is on Europe and the energy crisis,” he explained.
The information, relayed by several media, according to which the new British Prime Minister Liz Truss is preparing a plan of 40 billion pounds sterling to relieve the energy bill of companies has been welcomed by economic circles, as has the structural reform in come from the European electricity market promised by the European Union, according to the analyst.
But the impact of this crisis on the European economy remains uncertain and continues to worry the market.
Very few macroeconomic indicators are expected this week, which should be punctuated by meetings of several major central banks, mainly the European Central Bank (ECB) on Thursday, the Bank of Canada and the Central Bank of Australia (RBA).
Several members of the US Federal Reserve (Fed) are also due to speak by Friday, including Chairman Jerome Powell on Thursday.
On Tuesday, the ISM index of activity in services in the United States for August came out up, at 56.9%, well above the expectations of economists, who expected only 55.5%, a new signal of the strength of the US economy, despite fears of a slowdown in demand.
Investors again favor the hypothesis of a 0.75 percentage point hike in the Fed’s key rate at its next meeting in late September, after considering the possibility of a hike of only half a point .
The bond market reacted in tune, with a yield on 10-year US government bonds which jumped to 3.32%, against 3.20% on Friday.
Unsurprisingly, this acceleration in rates penalized the technology sector, which is very dependent on financing conditions because it finances its growth by borrowing.
Amazon (-1.76%), Alphabet (-1.91%) or semiconductor manufacturer AMD (-2.24%) led the retreat.
Overall, only a few so-called defensive stocks, less sensitive to the economic situation, floated, such as Johnson & Johnson (+0.84%), Coca-Cola (+0.58%) or Merck (+0.22%) .
The listed vehicle Digital World Acquisition Corp (DWAC), which is to merge with Donald Trump’s media group, including the social network Truth Social, fell (-17.01% to 20.74 dollars) before a decisive extraordinary general meeting tuesday. DWAC is asking its shareholders to extend by one year the deadline to finalize the merger, announced eleven months ago.
The pharmacy chain CVS limited its losses (-0.23% to 99.21 dollars), after the announcement of the acquisition of the network of healthcare professionals Signify (+0.45%), specializing in home visits , for about $8 billion. The brand is seeking to diversify and increase its care offering.
The management and acquisition companies of land with mining or oil potential Sitio Royalties (-1.35%) and Brigham Minerals (-2.87%) fell after announcing their next merger, which will give birth to a valued group $4.8 billion.
The Bed Bath & Beyond household goods chain, which is going through a difficult time, was battered (-15.28% to 7.31 dollars) after the suicide on Friday of its financial director, Gustavo Arnal, after a black week for the group.
The company will close 150 stores, reduce its workforce by 20% and borrow $500 million. It filed a regulatory document allowing it to proceed quickly with a capital increase.
© 2022 AFP