2023-10-10 20:43:06
New York (AFP) – The New York Stock Exchange closed higher on Tuesday, supported by falling bond yields, as investors keep a worried eye on geopolitical risks in the Middle East.
Published on: 10/10/2023 – 10:43 p.m. Modified on: 10/10/2023 – 10:41 p.m.
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The Dow Jones index gained 0.40% to 33,739.30 points, the technology-dominated Nasdaq advanced 0.58% to 13,562.84 points and the S&P 500 rose 0.52% to 4,358.24 points. .
Yields on Treasury bills fell significantly, which favored stocks.
Ten-year bonds stood at 4.64% compared to 4.80% at the last session, while the bond market remained closed on Monday due to a public holiday (Columbus Day). Two-year yields stood at 4.95%, compared to 5.08% at the last close.
The decline in bond rates reflects “partly a flight towards quality” and security of investments “because of the situation in Israel”, recognized Karl Haeling of LBBW.
US President Joe Biden said he was ready on Tuesday to deploy “additional resources” to support Israel.
For Karl Haeling and a number of analysts, the main factor in the drop in interest rates was above all the comments of several members of the American Federal Reserve (Fed).
“Yesterday, we had the vice president of the Fed Philip Jefferson and the president of the Dallas branch Lorie Logan who both estimated that there was less need to raise rates because the increase in yields on bonds of the Treasury acts as an increase in interest rates,” explained Mr. Haeling.
“So we now recognize that financial conditions have tightened, which will slow down the economy and inflation,” he concluded.
The President of the Atlanta Fed, Raphael Bostic also said on Tuesday that there was “no longer any need to increase interest rates”, believing that monetary policy was currently sufficiently restrictive and had not finished show its effects.
On the stock market, almost all sectors of the S&P finished in the green, starting with utilities (+1.36%) followed by consumer spending and materials (+1.09%).
Only the energy sector, which had risen sharply the day before due to fears of the consequences on the oil market of the attack by the Islamist movement Hamas once morest Israel, took a break (-0.02%).
On the market, Pepsico, which inaugurated the launch of the quarterly corporate results season, gained 1.88%.
The distributor of soft drinks, snacks and cereals raised its outlook for full-year results following a third quarter that beat expectations.
The group earned $23.45 billion in revenue in the third quarter, compared to $21.97 billion a year earlier. Net profit stood at $3.10 billion, compared to $2.70 billion a year before. For the whole year, earnings per share should rise by 13% instead of the +12% forecast so far.
In the wake of the momentum that affected the title of Pepsico, Coca Cola gained 2.19%.
Among the day’s performances, Boeing, heavyweight of the Dow Jones, gained 2.67%, in distribution Walmart advanced by 1.13% and Target by 3.66%.
After their sharp rise on Monday in the wake of Hamas’ surprise attack once morest Israel, the stocks of defense groups have declined slightly, such as Northrop Grumman (-1.68%) or Lockeed Martin (-0.33%). .
The market was also awaiting the announcement of the pricing of the shares of Birkenstock, the German sandal manufacturer which is due to debut on the New York Stock Exchange this week.
The stock’s unit price is expected to be between $44 and $49, which at the high end would represent a valuation of up to $9.2 billion, according to an SEC filing.
© 2023 AFP
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