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The New York Stock Exchange was in the green on Wednesday after a black session the day before, weighed down by the technology sector.
At around 3pm GMT, the Dow Jones was up 0.43%, the Nasdaq was up 0.87% and the S&P 500 was up 0.70%.
On Tuesday, the Nasdaq, where highly interest-rate-sensitive technology stocks are concentrated, fell 2.60% to 14,506.90 points, falling to its lowest level since October. It has almost lost 10% since its last record, bringing it close to the stage of correction. The Dow Jones index had lost 1.51% to 35,368.47 points and the S&P 500 1.84% to 4,577.11 points.
Bond rates on 10-year bills stabilized near their highest for two years at 1.84% against 1.87% the day before.
The indices had started the week – after the markets closed on Monday for a holiday – on a gloomy note, shaken by the rise in bond yields and the prospect that the American Central Bank (Fed) will be more aggressive in its monetary tightening.
On Wednesday, investors were reassured by a series of positive quarterly results.
“Things look better with a rebound effort on the open”, assured Patrick O’Hare of Briefing.com.
While the tone of the previous day’s results had been mixed, “the news coming from companies showed a different tone” on Wednesday, the analyst said.
Shares of banks Bank of America (+3.38%) and Morgan Stanley (+3.49%), health insurance group UnitedHealth (+1.49%) and consumer goods giant Procter and Gamble (+4.18) all opened sharply higher after announcing better-than-expected results in the 4th quarter.
Bank of America posted a quarterly profit up 30%, driven by its investment banking and asset management activities, as well as the good financial health of the majority of its retail banking customers.
Despite a turnover a little lower than the previous quarter, Morgan Stanley posted a profit higher than analysts’ forecasts. The two banks do not seem to have experienced the increase in payroll which penalized Goldman Sachs and JPMorgan Chase, whose results, despite everything excellent, had been sanctioned by Wall Street the day before.
Procter and Gamble has raised its growth forecast for the 2022 financial year thanks to strong demand and rising prices. The dollar retreated slightly against the euro after having inflated strongly the day before, on fears of a more aggressive than expected monetary policy from the Fed to fight against inflation.
Quotes
The Central Bank’s Monetary Committee meets next week and is expected to give guidance on its path to raising rates. Crude oil prices, on the other hand, continued to race ahead.
“The list of obstacles is not new. Inflation is at the top, as is the Fed, which makes you wonder how aggressive it will be to fight rising prices,” said Art Hogan of National Securities. .
“Next are the ongoing problems in the supply chain which are fueling inflation and finally the rise in bond yields which is affecting the technology sector”, continued the specialist who estimates that inflation “probably peaked in December”, at 7% over one year. In terms of economic data, the rise in new housing starts to 1.702 million on an annual basis for December, more than expected, also gave investors heartache.
In the wake of their tumble in Tokyo, Sony shares slid 2.62% to 112.80 dollars in New York, the day after the announcement of the takeover by Microsoft, its rival in the video game sector, of the publisher Activision Blizzard for a record $69 billion.
Activision Blizzard, whose action had gained more than 25% the day before the announcement of the transaction, fell back a little to 81.82 dollars (-0.60%). Microsoft, which initially had been sanctioned given the amount of the buyout, ending down 2.43% on Tuesday, rebounded 3.60% to 313.55 dollars.
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