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Dow attempts stabilization above 30,000 points

NEW YORK Concerns about the economy due to high inflation and the resulting need for a quick turnaround in interest rates pushed the leading US index down almost 5 percent last week to its lowest level since the end of 2020. The week before, the loss had been almost as high. For many market participants, however, the recent sell-off seems to have gone too far, as evidenced by the rises on some Asian and European stock exchanges. The mood is supported by statements by President Joe Biden that a recession in the USA is not “inevitable”.

Fresh data from the important US real estate market had little impact on the indices. Existing home sales fell 3.4 percent in May. It was the fourth straight decline. However, analysts had expected a slightly stronger decline. The real estate market is under pressure because, on the one hand, rising interest rates are making it more expensive to finance apartments and houses, and on the other hand, sales prices are threatening to collapse if demand falls.

From an industry perspective, energy stocks were at the top of investor favourites. They benefited from significantly higher oil prices. Accordingly, Chevron shares led the Dow with a plus of 4.0 percent. ExxonMobil stocks are up more than 6 percent.

The electric car manufacturer Tesla will cut 3 to 3.5 percent of its jobs in the coming months. This was made clear by company boss Elon Musk on Tuesday after conflicting reports. The tech billionaire reiterated that he expects a recession in the US in the near future. Tesla shares soared more than 10 percent.

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Food maker Kellogg has come under the spotlight with news of a split into three public companies. The international snack and cereal business with well-known brands such as Kellogg’s, Frosties and Pringles will form the core in the future. The announcement drove the papers up 3.1 percent.

There seems to be no end in sight to the struggle for Jetblue to take over the Spirit airline. Jetblue has now improved the offer again to outperform Frontier Airlines. Spirit’s shares gained 8.3 percent and Jetblue’s shares gained 1.2 percent.

Shares in dialysis provider Davita fell after the US Supreme Court made an unfavorable ruling on reimbursements for the treatment of certain dialysis patients.

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