Wednesday, January 26

Wall Street closes higher, record for the Dow Jones and the S&P 500

The New York Stock Exchange finished higher on Monday, with a new record for the Dow Jones and the S&P 500, driven by renewed optimism.

The flagship index of New York City ended at 36,585.06 points, up 0.68%, while the extended S&P 500 index reached 4,796.56 points, up 0.64%.

The Nasdaq index gained 1.20% but remained quite far from its record, at 15,832.80 points.

Despite the unprecedented spread of the coronavirus around the world since the appearance of the Omicron variant, “fears are subsiding,” said Jack Ablin, head of investment strategy at Cresset Capital.

Although the average number of cases has tripled in the United States, the number of daily deaths is, therefore, slightly down.

For the manager, the New York Stock Exchange has adopted “a growth scenario”, which has led him to favor technology groups, primarily equipment manufacturers.

Graphics card maker Nvidia (+ 2.41%), semiconductor specialist AMD (+ 4.41%) and memory card giant Micron (+ 2.79%) have all surfed this unexpected wave.

“It’s remarkable that the market is doing so well with interest rates getting so tight,” commented Jack Ablin. “One would have expected technology stocks to fall.”

The benchmark ten-year US government bond rate jumped 12 basis points (0.12 percentage point) to 1.63%, for the first time since the identification of Omicron.

Tech companies are often categorized as growth stocks, which means they need to invest in order to grow and benefit from a low interest rate environment.

But the prospect of rate hikes by the American Central Bank (Fed) this year and the rise in bond rates on Monday signal an increase in credit prices, which is, a priori, unfavorable to them.

The good performance of financial companies for the first session of the year is more logical in this context of accelerating interest rates.

Goldman Sachs (+ 3.34%), Visa (+ 2.18%) or American Express (+ 2.82%), all members of the Dow Jones, thus pulled the index towards this new record.

But the event of the rating will have undoubtedly been the new peak for Apple (+ 2.50% to 182.01 dollars), which has become the first company to exceed 3 trillion in market capitalization.

The Cupertino (California) group had only crossed the $ 1,000 billion mark just over three years ago, 38 years after its IPO.

Another member of the club of more than 1,000 billion dollars in capitalization, Tesla soared (+ 13.53% to 1,199.78 dollars), capitalizing on a fourth quarter in cannonball, during which the manufacturer delivered 308,600 cars, is much more than expected.

In 2021, the group came close to one million vehicles delivered, to 936,000.

Tesla has followed in its wake its competitors Lucid (+ 7.57%) and Nikola (+ 3.75%).

Roller coaster specialists, the titles that symbolize the Covid-19 crisis, namely cruise passengers, have climbed, like Carnival (+ 6.41%), Norwegian (+ 6.94%) or Royal Caribbean ( + 5.11%).

Verizon (+ 0.92%) and AT&T (+ 3.37%) also ventured into the green, after sending an inadmissibility to the American authorities on Sunday, who asked them to further postpone the commissioning of their new 5G frequency bands, due to concerns in the airline industry about possible interference.

In the sales department, Moderna (-7.45%) and Pfizer (-4.06%) fell, shunned by investors as their competitive advantage wanes in the fight against Covid-19.

  1. Nasdaq

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