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New York (AFP) – The New York Stock Exchange regained momentum at the opening on Wednesday, boosted by the first encouraging company results and by better consumer morale before the end of the year holidays.
Around 3:10 p.m. GMT, the Dow Jones climbed 1.16%, the Nasdaq advanced 1.07% as did the S&P 500.
On Tuesday, the indices had timidly finished in the green following four sessions of decline.
The Dow Jones index had advanced by 0.28% to 32,849.74 points, the Nasdaq, dominated by technology, had remained stable ending at 10,547.11 points (+0.01%) and the broader S&P 500 index had gleaned 0.10% to 3,821.62 points.
Nike shares pranced up 13.56% to $117.21 as investors celebrated much better-than-expected Q2 results for the sportswear maker.
The brand, which suffered from too large an inventory, partially sold its stocks while managing to increase its turnover by 17%, more than analysts expected.
Thanks to “strategic action on the price” of its products, the group posted a profit per share of 0.85 dollars, once morest 0.65 dollars expected by analysts, which aroused the optimism of investors for the season of results to come although the specter of a recession remains present.
Fedex stock also stood out, rising 4% to $170.80. The express carrier announced Tuesday following the closing of new savings measures which should allow it to compensate for a slowdown in its activity.
It now forecast a cost contraction of $3.7 billion for its entire staggered 2023 fiscal year, which runs through the end of May, which was welcomed by investors.
“The positive market response to these early corporate results is paradoxical because it comes from totally different perspectives,” observed Patrick O’Hare of Briefing.com.
“In the case of Nike, this is because demand for its products is still strong and its inventory problems are behind it,” said the analyst.
“In Fedex’s case, it’s more rooted in the company’s desire to preserve margins by cutting costs even further,” he added.
Consumer morale is rising
On the indicators front, the real estate market continued to look gloomy with home resales down for the 10th month in a row. The second-hand housing market thus fell by 7.7% in November compared to October, a development worse than expected.
It fell by 35.4% over one year, mainly due to the rise in interest rates which discourages buyers from taking out mortgages.
Investors, on the other hand, appreciated the consumer confidence index for December, published half an hour following the opening.
The survey, carried out by the Conference Board, shows a stronger than expected rebound in consumer sentiment to 108.3 points once morest 101.4 points in November, a peak since April.
On the odds, Tesla shares, which had hit a new low for a year on Tuesday (-8%) amid the cacophony of Elon Musk’s intentions in relation to Twitter, picked up a little momentum on Wednesday ( +1.97%).
Elon Musk announced on Tuesday evening that he would leave the head of Twitter as soon as he “found someone crazy enough” to succeed him.
The owner of the microblogging platform thus reacted to the result of the poll he himself had initiated on Monday on Twitter, asking whether he should leave the head of the company or not, 57% of the 17 million voters responding with the affirmative.
In three months, the title of the electric vehicle manufacturer had lost nearly 55% of its value on Wall Street, and more than 33% since the takeover of Twitter.
© 2022 AFP