NEW YORK (dpa-AFX) – In the US stock market, investors continue to watch the development of the yields of US government bonds. Therefore, the stock exchanges are largely up and down. After an overall weaker start, industrial orders supported the stock exchanges better than expected in the course of trading on Thursday. In addition, the statements of the Saudi oil minister supported, who pleaded for a cautious production policy during the OPEC meeting on the production strategy for crude oil from April onwards.
The best-known index, the Dow Jones Industrial, rose after a directionless trend by 0.21 percent to 31,334.97 points. The market-wide S&P 500 turned positive and rose by 0.09 percent to 3823.31 points. The Nasdaq 100, which had temporarily slumped by a little more than one percent, now gained 0.29 percent to 12,719.93 points.
After the effective interest rate for ten-year US government bonds had risen to 1.47 percent the day before, it remained there on this trading day. Last week it had reached its highest level in a year at around 1.55 percent. Rising growth and inflation expectations are considered to be the trigger for the rise in yields. This is a danger for equity investors, as bonds become more interesting as an investment alternative as interest rates rise. Refinancing can also become more expensive for companies.
Before US Federal Reserve Chairman Jerome Powell will comment in a few hours, the overall focus was on rather positive economic data. While slightly more people filed for unemployment benefits last week than the previous week, productivity in the U.S. economy fell less sharply than expected in the fourth quarter of 2020. In addition, orders for US industrial companies rose faster than forecast at the beginning of the year and the data for December were also revised upwards.
On Powell, analysts also said that his speech that day would be his last chance to comment on bond market developments before a two-week standstill period began over the weekend before the next meeting of the Federal Reserve Open Market Committee. This committee makes important monetary policy decisions such as setting the key interest rate.
On the corporate side, the focus was on companies with figures and study data, takeovers and collaborations.
Curevac only made strong gains on the Nasdaq for a short period of time and were recently up 0.7 percent. The Swiss pharmaceutical company Novartis and the Tübingen vaccine manufacturer signed a production agreement. Novartis is to produce the mRNA and the active ingredient for the corona vaccine candidate CVnCoV from Curevac. At the end of January, Novartis had already reached a similar agreement with Mainz-based Biontech.
Amgen, Five Prime Therapeutics and Square attracted attention because of takeover plans. The US biotech group Amgen wants to further expand its business with novel cancer drugs and therefore take over the biotechnology company Five Prime Therapeutics for 1.9 billion dollars (around 1.6 billion euros). While Amgen then rose by 1.5 percent, the Five Prime stocks shot up by 78 percent.
At the same time there was another takeover announcement: The music service Tidal from rap star Jay-Z gets a new owner: The payment company Square of Twitter boss Jack Dorsey takes over the majority for 297 million dollars. Jay-Z is slated to join Square’s board of directors as part of the deal. The shareholders of Square, however, reacted with little enthusiasm. The papers lost 4.5 percent on the Nyse.
The pharmaceutical company Eli Lilly went up 0.7 percent after further study III data on the effectiveness and safety of the drug candidate Tirzepatid with semaglutide for the treatment of diabetes.
Marvell Technology lost 7.1 percent on the Nasdaq. The chip manufacturer for broadband communication had presented its figures for the fourth quarter of 2020 the evening before and only performed as expected in terms of earnings per share./ck/he