Wall Street ends higher, bargain buying after the storm

A New York Stock Exchange operator (AFP/ANGELA WEISS)

The New York Stock Exchange ended higher and benefited from bargain buying after a dark day on Tuesday, in a session that was buoyed by a new inflation indicator that showed a slight drop in prices in the United States. .

The Dow Jones gained 0.10%, the Nasdaq index gained 0.74% and the broader S&P 500 index gleaned 0.34%.

Wall Street took almost the entire session to decide and was still moving in scattered order a few minutes from the close, before leaving frankly in the green.

“We evolved in tight margins, around balance, because we were in the digestion phase,” summarized Jay Hatfield, manager of the ICAP ETF fund. “It’s a classic day after a big skid.”

The New York market experienced one of its worst days of the year on Tuesday, with the Nasdaq losing the fourth largest total points in its history, after the publication of the CPI price index, higher than expected.

“History tells us that such one-day dropouts turn out to be buying opportunities,” said George Smith of LPL Financial.

In fact, investors bought up some of the most battered stocks on Tuesday, including Tesla (+3.59%), Amazon (+1.36%), Netflix (+2.75%) and Apple (+0, 96%).

Untenable on Tuesday, bond rates stabilized. The ten-year US government bond yield was unchanged at 3.40%.

The VIX index, which measures market volatility, fell slightly, another sign of calm.

However, the appetite for risk, which had blown on Wall Street before Tuesday’s shutdown, has not completely returned and some of the injured the day before were still attacked, first and foremost Meta (-1 .08% to $151.47), falling to a new low since the start of the coronavirus pandemic, in March 2020.

The cryptocurrency sector also remained at half mast, in tune with bitcoin, which has lost more than 10% since Monday.

The Block payments specialist, heavily invested in the blockchain, the technology on which cryptocurrencies are built, was shunned (-1.47%), as was Riot Blockchain (-0.92%).

Investors welcomed the publication of the PPI index for producer prices, or wholesale prices, which fell by 0.1% over one month in August, as expected, even if the index excluding food and energy it rose by 0.4%, more than expected (0.3%).

“These data will not change the decision of the Fed (US central bank) next week,” commented Ian Shepherdson of Pantheon Macroeconomics in a note.

Traders still see a 0.75 percentage point hike in the Fed’s policy rate at this meeting, but are increasingly giving credence to the scenario of a 1.75 or even 2 percentage point hike , by the end of the year, against 1.50 points so far.

A bad wind has started to blow over the railway companies two days before a crucial deadline, which could lead to a massive strike by part of the rolling staff. CSX (-1.05%), Canadian National (-0.50%) and Union Pacific (-3.69%) were thus backtracking.

The freezing of freight in the United States could severely handicap the activities of many sectors, in particular those of mining companies such as Freeport-McMoRan (-3.29%) or the steelmaker US Steel (-8.63%).

For its part, Starbucks was sought (+ 5.53% to 92.70 dollars) after the increase, Tuesday, of its growth forecasts for the period 2023-2025. The coffee chain is now banking on a range of 7 to 9% annual increase in its turnover on a like-for-like basis, against 4 to 5% so far.

The decision of the cable operator Comcast to double its envelope dedicated to share buybacks, to 20 billion dollars, was welcomed by the New York market (+3.02% to 34.47 dollars).


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Wall Street ends higher, bargain buying after the storm

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