Home » News » New York stocks close: Sharp gains ahead of the long weekend | 07/01/22

New York stocks close: Sharp gains ahead of the long weekend | 07/01/22

NEW YORK (awp international) – The US stock markets closed with significant gains on Friday after a changeable course. On the last trading day before the long weekend, the leading index Dow Jones Industrial ultimately managed an increase of 1.05 percent to 31,097.26 points. On a weekly basis, this is still a loss of 1.3 percent. There will be no stock market trading in New York next Monday due to the US Independence Day.

The market-wide S&P 500 rose 1.06 percent to 3825.33 points on Friday. The tech-heavy Nasdaq 100 gained 0.71 percent to 11,585.68 points, but was down 4.3 percent for the week.

The day before, the three stock market barometers had left trading with historically high price discounts for the first half of the year. Many investors around the world had recently lost interest in shares in view of rising interest rates and concerns about a possible impending recession.

Some investors could now hope for improvement. John Higgins, chief economist markets at the economic research consultancy Capital Economics, was skeptical. After the drought in the first half of the year, he does not expect a positive price development on Wall Street and the US bond market in the second half either, the expert wrote in a recent publication. Because the US Federal Reserve is likely to raise interest rates more and then leave them at this level longer than currently priced in.

With fears of a recession mounting, the market has also begun to assess the impact on corporate earnings prospects, commented Spi Asset Management expert Stephen Innes. Current data from the world’s largest economy was moderate.

Sentiment in industry fell more sharply than expected in June to a two-year low, as the purchasing manager index of the Institute for Supply Management (ISM) shows. The mood indicator, which is used as a gauge for overall economic growth, is still well above the growth threshold of 50 points. Meanwhile, signs of weakness from the US housing market continue: Construction spending in May fell slightly month-on-month, while analysts had expected an increase.

The semiconductor manufacturer Micron is now feeling the effects of weaker demand. The sales outlook for the last business quarter, which was published after the trading day on Thursday, was disappointing, according to stockbrokers. The stock fell nearly 3 percent. The prices of industry colleagues AMD, Nvidia and Texas Instruments were also affected, as the losses of 3.3 to 4.2 percent showed.

Meanwhile, the Kohl’s department store chain caused a sensation – it announced the end of talks about a takeover by the Franchise Group. Management cited the challenging financing and retail environment after three weeks of exclusive negotiations, saying these are impediments to reaching an acceptable agreement with the potential buyer. Many disappointed investors fled the title, which has been under massive pressure for weeks anyway – in the end there was a minus of almost 20 percent. The papers of the prospective buyer became cheaper by seven and a half percent.

Meanwhile, General Motors (GM) shares were up nearly 1.5 percent, even though the automaker had reported a significant drop in sales for the second quarter. The company continues to struggle with supply chain problems and a persistent shortage of computer chips. In addition, the promised quarterly profit fell well short of the consensus estimate.

The euro pared losses in line with benign US stock markets, last trading at $1.0432 in New York. It was trading above the reference rate of 1.0425 (Thursday: 1.0387) US dollars that the European Central Bank had previously set.

Investor interest in US government bonds, which are perceived as safe, continued: the futures contract for ten-year US government bonds (T-Note Future) rose on the last trading day of the week, when trading ended early at 8:00 p.m. (CEST), by 0.79 percent to 119.47 points. In return, the yield on ten-year government bonds fell to 2.89 percent – at times it reached its lowest level in a month

— By Gerold Löhle, dpa-AFX —

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.