New York (AFP) – The New York Stock Exchange ended higher on Friday, buoyed by late-trading buying following another sluggish week and ahead of a three-day holiday weekend.
The Dow Jones appreciated by 1.05%, to 31,097.26 points, the Nasdaq index, with a strong technological composition, by 0.90%, to 11,127.84 points, and the broader S&P 500 index, by 1.06%, to 3,825.33 points.
“Closing prices on a Friday before a long weekend (US National Day) are particularly important,” said Nick Reece of Merk Investments.
“Those who took positions during the session sold them and it was more long-term investors who bought before the close on a Friday,” according to the analyst.
The day following the end of the worst semester experienced by Wall Street since 1970, the session got off to a bad start, with the indices falling into the red following the publication of two American indicators below expectations.
The index of the professional federation ISM showed that the growth of manufacturing activity fell, in June, to its weakest rate since June 2020.
The ISM also reported falling orders and contracting employment, also for June.
Another black spot, construction spending fell 0.1% in May over one month, while economists had forecast an increase of 0.4%.
However, despite these poor figures, the New York market is back in the green and even accelerated at the end of the session, the first of the second half.
“The idea that’s going around is that bad news will become good news for equities,” said Jack Ablin of Cresset Capital.
The reasoning would be that “bad (economic) news will help keep interest rates low and lead to lower demand and more contained inflation,” he argued.
In this context, “there is a growing impression that the Fed (US central bank) is not going to be as aggressive as it had announced”, continued the analyst.
The mood spilled over into the bond market, which has seen rates contract sharply since Tuesday. The yield on 10-year US government bonds thus stood at 2.89%, once morest 3.20% on Tuesday.
The buying trend at the end of the session was carried by the rating giants, such as Apple (+1.62%), Microsoft (+1.07%) and Amazon (+3.05%), but also by the values so-called defensive, that is to say theoretically less sensitive to the economic situation.
Coca-Cola (+2.34%), McDonald’s (+2.46%) or Procter & Gamble (+1.61%) thus pulled out of the game.
This movement succeeded in compensating for the cold snap in the semiconductor sector, weighed down by several negative information.
The manufacturer of microprocessors Micron (-2.95% to 53.65 dollars) thus published, Thursday following the market, forecasts very much lower than analysts’ expectations for the fourth quarter of its staggered fiscal year (from June to August) .
“Recently, demand has weakened in the industry, so we are making sure to reduce the growth of our supply,” commented Managing Director Sanjay Mehrotra.
In addition, according to the specialized daily DigiTimes, AMD, competitor of Micron, as well as the specialist in graphics cards Nvidia would seek to reduce their orders with the giant Taiwanese outsourcing TSMC, due to a slowdown in demand for smartphones. and computers.
These developments drove the entire sector, from Qualcomm (-3.30%) to Broadcom (-1.64%), via Intel (-2.86%).
Same music at Meta (ex-Facebook, -0.76% to 160.03 dollars), which would have reduced its forecasts for hiring engineers by 30%, according to an internal document obtained by the Archyde.com agency, in which the CEO Mark Zuckerberg expects “one of the worst turnarounds (in economic conditions) we’ve seen in recent history.”
The American automaker General Motors resisted (+ 1.35% to 32.19 dollars) following reporting a 15% decline in sales in the second quarter but confirming its forecasts for 2022.
The chain of department stores Kohl’s unscrewed (-19.64% to 28.68 dollars), following the breakdown of its negotiations with Franchise Group for a takeover. The board of directors considered that, “given the environment and the volatility of the market”, it was “not prudent to continue to work on a transaction”.
© 2022 AFP
