The New York Stock Exchange ended in the red after a volatile session on Wednesday, after already heavy losses the day before in reaction to the rise in bond rates which led the Nasdaq into the correction zone.
According to final results, the Dow Jones index dropped 0.96% to 35,028.65 points. The technology-heavy Nasdaq lost 1.15% to 14,340.25 points and the S&P 500 0.97% to 4,532.76 points.
After a severe fall on Tuesday, mainly caused by the technology sector, which is more sensitive to interest rates, the indices had nevertheless started the session on a rebound.
But this momentum did not hold. On the one hand, the Nasdaq continued its decline, falling back into a correction zone, since the index has lost more than 10% since its last record two months ago.
On the other hand, the Dow Jones, where so-called “value” classic economy stocks have more weight, also took a nosedive as investors looked for profit taking.
Bond yields on 10-year US Treasury bills, which had risen sharply the day before, up to 1.90% overnight, stabilized at 1.84%.
“A lot of stocks that had done very well over the last few weeks, like food, energy, financials, are losing steam,” said Tom Cahill, senior portfolio strategist for Ventura Wealth. Management.
“We’ve been betting very hard on these stocks but, as bond yields stabilize, we’re now seeing some profit taking in these value stocks,” the analyst continued.
The good quarterly results announced by the banking groups Bank of America (+0.41%) and Morgan Stanley (+1.85%) or even by the consumer goods giant Procter and Gamble (+3.36%) n failed to arouse the good mood of investors.
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 that of the previous quarter, Morgan Stanley posted a profit higher than the forecasts of the analysts.
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 and again on Wednesday. Wells Fargo shed 1.98%, JP Morgan 1.55% and Goldman Sachs 2%.
Procter and Gamble has raised its growth forecast for fiscal year 2022 on the back of strong demand and rising prices.
Apart from consumer products and utilities, all S&P sectors ended in losses, starting with financials (-1.65%) and information technology (-1.37%).
Within the value stocks that prompted profit taking, automotive groups suffered like Ford (-7.92% to 22.45 dollars) or General Motors (-4.34% to 56.24 dollars) or even Boeing (-3.12% to $217.08).
The dollar fell slightly against the euro after rising sharply the day before, on fears of a more aggressive than expected monetary policy from the Fed to fight inflation.
The US central bank’s Monetary Committee is meeting next week and is expected to give guidance on its path to raising rates.
Crude oil prices, on the other hand, continued their run up, approaching 90 dollars for a barrel of Brent, their highest since October 2014.
In terms of economic data, the rise in new housing starts to 1.702 million at an annual rate for December, more than expected, helped the indices to recover for a moment in the first part of the session.
Illustrating the correction that the Nasdaq is undergoing, star stocks like Apple (-2.10% to $166.23) or Tesla (-3.38% to $995.65) have fallen sharply.
In the wake of their tumble in Tokyo, Sony shares slid 5.01% to 110.04 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 amount of almost $69 billion.