New York (AFP) – The New York Stock Exchange lost, at the end of the session, the little momentum it had found and closed slightly lower on Wednesday, driven in particular in the red by the energy sector.
The Dow Jones fell 0.15% to 30,483.13 points, the Nasdaq index, influenced by technology stocks, lost 0.15%, to 11,053.017 points, and the broader S&P 500 index fell 0.13% to 3,759.89 points.
“The market was hesitant today,” reacted Angelos Kourkafas of Edward Jones, “which is not surprising because the story he tells himself has not changed”.
After opening lower, the indices had risen throughout the day, before running out of steam.
“Overall, to have finished today without erasing a significant portion of the gains made yesterday (Tuesday) is a victory,” said Art Hogan of National Securities.
A good part of the meeting was occupied by the hearing of the president of the American central bank (Fed), Jerome Powell, before the banking committee of the Senate.
The official repeated his determination to fight inflation, saying that a recession, mainly due to the Fed’s monetary brake, was “a possibility”.
“We are not trying to cause a recession, we do not need it”, however argued Jerome Powell. “We believe above all that it is absolutely essential to bring back price stability, which will benefit the labor market.”
“I don’t think Powell said anything new,” Art Hogan considered, “and that’s often the case in these congressional hearings. So tomorrow (hearing before a committee of the House of Representatives) , it should be the same.”
“The fact that cyclicals and the energy sector are all down signals, in my view, that investors are worried about growth as recessionary risks emerge,” said Angelos Kourkafas.
Among the cyclical stocks, more sensitive to the economic cycle than the average, the specialist in construction vehicles Caterpillar (-4.35%) or the manufacturer of tractors and mowers John Deere (-3.44%) both fell back.
As for the energy sector, it was undermined by the fall in the price of oil and raw materials in general. The oil companies Exxon Mobil (-3.96%) and Chevron (-4.35%), the steelmaker US Steel (-2.70%) or the gas group Cheniere (-4.44%) experienced the sequence badly , as did mining Freeport-McMoRan (-7.96%).
On the other hand, the so-called defensive stocks, the least sensitive to the economic situation, resisted, like the whole of the pharmaceutical sector, whether it is Merck (+1.28%), Johnson & Johnson (+1.58%) or Moderna (+4.68%).
For once, in this atmosphere of relative risk aversion, many technology stocks performed well. Amazon (+0.25%), PayPal (+0.83%) or Netflix (+4.67%), which would be in the process of finding a partner to create its offer with advertising, thus pulled out of the game.
“As bond yields fell, these stocks got a boost today,” Angelo Kourkafas said.
The bond market was in fact taken by storm, and its rates, which move in the opposite direction to prices, contracted violently. The yield on 10-year US government bonds fell to 3.15%, against 3.27% the day before.
Elsewhere on the stock exchange, the tobacco company Altria plunged (-9.19% to 41.50 dollars) after the government’s decision, announced on Tuesday, to reduce the nicotine level of cigarettes sold in the United States, which would, according to experts, to limit the dependence of smokers.
Another blow for the group from Richmond (Virginia), the American agency which notably regulates the marketing of tobacco and its affiliated products is preparing to ban the sale of Juul products, a giant of electronic cigarettes in which Altria owns 35% of the capital.
Revlon continued its wild ride (+34.32% to 8.14 dollars). After having melted by 73% after the publication of the first information related to its bankruptcy filing, which took place on Thursday, the cosmetics group saw the value of its title more than quintuple, boosted in particular by the influx of private investors, decided to speculate on the action.
© 2022 AFP