Published on : 07/09/2022 – 22:58
New York (AFP) – The New York Stock Exchange ended higher on Wednesday and finally managed to rebound after a series of declines, partly supported by statements from central bankers as well as a contraction in bond yields.
The Dow Jones gained 1.40%, the Nasdaq index took 2.14% and the broader S&P 500 index, 1.83%.
For Art Hogan, of B. Riley Wealth Management, “the wave of declines had gone too far” and Wall Street was ready for a technical rebound, fueled by bargain buying.
Unsurprisingly, the most volatile star stocks on the rating, such as Netflix (+4.84%), PayPal (+3.66%) or Tesla (+3.38%) were all searched for.
This session in the green ended a series of seven consecutive sessions of decline for the Nasdaq, a first since 2016.
The trend was supported by the speech of the vice-president of the American central bank (Fed), Lael Brainard, who reiterated the institution’s determination to fight against inflation but warned against “the risks linked to excessive tightening”.
For Art Hogan, these remarks opened the door to a possible deceleration by the Fed in the event of a marked deterioration in the American economy.
Equities also benefited from the easing of bond yields, which had jumped on Tuesday. The yield on ten-year US government bonds fell to 3.27% from 3.34%.
In the short term, operators nevertheless expect a continuation of the Fed’s rate hike cycle. The yield on three-month US government bonds has also crossed 3% for the first time in fourteen years.
For analysts at Briefing.com, the market also welcomed the release of the Fed’s Beige Book, according to which US companies reported economic activity similar to that presented in the previous edition in mid-July.
Illustration of the constraints facing American companies, the agri-food group Kraft Heinz (-0.29% to 37.32 dollars) confirmed its operating profit target for its 2022 financial year, but reports an increase of 20 % of its costs over the year, which it hopes to offset through price increases.
Apple only benefited marginally (+0.93% to $155.96) from the presentation of its new range of smartphones, including the iPhone 14, at a price similar to that of the two previous versions, despite the ‘inflation.
The course of Twitter recovered (+6.60% to 41.20 dollars) after the new refusal of the judge in charge of his dispute with Elon Musk to postpone the date of the trial which must oppose the two parties. The magistrate nevertheless authorized the entrepreneur to integrate into the procedure the elements presented by the whistleblower Pieter Zatko.
The listed vehicle Digital World Acquisition Corp (DWAC) recovered a little (+4.25% to 23.07 dollars) after dropping 11.44% on Tuesday. High uncertainty hangs over its merger with Donald Trump’s media company, Trump Media and Technology Group. Initially scheduled for Tuesday, the general meeting which must decide on the postponement of the merger deadline has been postponed to Thursday.
AIG advanced (+2.56% to 53.70 dollars) after having formally launched the IPO process for its asset management and life insurance subsidiary Corebridge Financial.
This operation, scheduled for the end of September, should be, by far, the most important entry of a company on Wall Street this year, with a total valuation estimated between 13.5 and 15.5 billion dollars.
American Airlines (+5.07%) and United Airlines (+5.52%) benefited, the first from maintaining its forecasts, the second from raising its operating income projection, both reporting a demand still strong despite the end of the summer season.
© 2022 AFP