The New York Stock Exchange finished sharply in the red on Friday, on the defensive in the face of mixed corporate results and the threat of further US sanctions against China.
Its flagship index, the Dow Jones Industrial Average, fell 2.55% to 23,723.69 points, and the technology-heavy Nasdaq fell 3.20% to 8,604.95 points.
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The broader S&P 500 index, which represents the 500 largest companies on Wall Street, fell 2.81% to 2,830.71 points.
“The market needed a little break anyway, that’s not a big deal,” remarks Karl Haeling of LBBW.
Over the whole of April, the Dow Jones appreciated by 11.1% and the S&P 500 by 12.7%, the two indices recording their best monthly performance since 1987.
The Nasdaq rose 15.4%, its best month since 2000.
Over the week, the Dow Jones and the S&P 500, however, fell 0.2% and the Nasdaq 0.3%.
Friday, market players digested the quarterly publications of several big names in the rating including Amazon (-7.60%), which warned that it would spend the $ 4 billion in operating profit expected this quarter to invest in management of the crisis, and Apple (-1.61%) which did not want to give forecasts for the current quarter.
US President Donald Trump has also rekindled the flame of the trade war with China by saying he was considering punitive taxes against Beijing after seeing evidence suggesting that the new coronavirus would come from a Chinese laboratory in Wuhan.
“It seems incredible that he is choosing to return to the front lines now given the state of the economy, but Mr. Trump seems to want to put the attacks on China at the center of his new election campaign,” remarks Mr. Haeling.
“The downturn in the market is not so much linked to disappointments (generated by the various announcements of companies) as to the observation that their shares, as well as many others, have risen too quickly too strongly,” said Patrick for his part. O’Hare from Briefing.
The S&P 500 has appreciated by 35% since March 23 even as indicators reflect one after another the severity of the economic shock caused by the Covid-19 pandemic and the restrictions imposed to stop its spread, underlines the specialist .
With the gradual lifting of containment measures, “we will now get to the heart of the recovery, and the hopes of a restart will come up against the harsh reality on the ground,” he notes. “Investors will readjust their risk taking accordingly and we will probably see more resistance.”