NEW YORK (dpa-AFX) – The US stock market started trading with losses after the strong previous week. In the course of trading on Monday, the selling pressure had increased somewhat after the head of the US Federal Reserve, Jerome Powell, caused uncertainty with statements on monetary policy. Powell raised the possibility of faster rate hikes given the “much too high” rate of inflation. The Fed could also hike interest rates by more than 0.25 percentage points at upcoming Federal Reserve Board meetings if needed, Powell said. Higher interest rates make risky assets like stocks less attractive compared to bonds.
After a weekly plus of almost 5.5 percent, the leading index Dow Jones Industrial (Dow Jones 30 Industrial) recently fell by 0.98 percent to 34,414.60 points. The market-wide S&P 500 lost 0.58 percent to 4437.42 points. The technology-heavy selection index NASDAQ 100 fell by 1.19 percent to 14,248.84 points.
Among stocks, Boeing shares came under significant pressure after a China Eastern Airlines 737-800NG crashed from a great height in China with 132 on board. The papers recorded a minus of more than four percent at the end of the Dow.
The crash happened in a remote, hilly area near the city of Wuzhou in southern China’s Guangxi region. China’s head of state and party leader Xi Jinping called on the airline to deal with the consequences of the accident appropriately and to investigate potential dangers to air traffic. China Eastern Airlines immediately ordered all Boeing 737s in its fleet grounded first.
The accident is primarily a tragedy for those directly involved and also comes at an extremely sensitive time, wrote analyst Seth Seifman of the US bank JPMorgan. After a three-year break, Boeing finally wants to resume deliveries of the 737 Max to China, which made the headlines after crashes. According to the expert, a significant delay in deliveries would likely affect cash flow in the current year.
Meanwhile, the papers of the insurer Alleghany jumped up by almost a quarter, because Warren Buffett’s investment company Berkshire Hathaway is again tackling a billion-dollar takeover after years of reluctance. An agreement has already been reached. Berkshire Hathaway shares gained a good two percent.
Rising oil prices drew investors’ attention back to ExxonMobil and Chevron. New uncertainties in the global supply of crude oil caused prices to rise. Over the weekend, Yemeni Houthi rebels attacked various targets in Saudi Arabia, including facilities owned by state oil company Aramco (Aramco (Saudi Aramco)).
In addition, the situation on the oil market is very tense because of the Ukraine war, since Russia is a major producer and exporter of oil. Commodity expert Carsten Fritsch from Commerzbank explained the jump in the price of oil with speculation about a possible import ban by the European Union (EU) for deliveries from Russia. A meeting at the highest EU level with US President Joe Biden is planned for this week, at which further sanctions against Russia are likely to be discussed, said Fritsch. Chevron’s stock rose 1.5 percent and ExxonMobil’s stock rose more than 4 percent./la/ngu
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