(New York) The New York Stock Exchange ended higher on Monday, reversing the trend after a start in the red and overcoming, for one session, concerns about a possible escalation in the Middle East.
The Dow Jones gained 0.59%, the NASDAQ index gained 0.39% and the broader S&P 500 index gained 0.63%.
The session started in the red, with investors concerned about the possible consequences of the offensive by the Palestinian Islamist movement Hamas against Israel.
But the clues ultimately crumbled only moderately.
“A lot of people expected things to go worse than they did,” said Patrick O’Hare of Briefing.com.
Noting that the New York market was holding up better than expected, many operators who had bet on a fall then sought to hedge, by buying, according to the analyst.
Furthermore, if the bond market was closed due to a public holiday in the United States (Columbus Day), futures contracts on American Treasury bonds were subject to quotation.
The latter have regained their height, “which suggests that rates will fall” when the bond market reopens, “a favorable outlook for stocks”, underlined Patrick O’Hare. Bond prices thus move in the opposite direction to their rates.
Despite this positive session, Wall Street remains fragile. “We have a major geopolitical risk ahead of us and no one knows how things will develop in the days and weeks to come,” warns the analyst.
“Historically, military shocks tend to have only limited influence on markets,” says CFRA’s Sam Stovall.
After an inflection, they generally resume after two or three months, according to the analyst, who nevertheless indicates that the Yom Kippur War in 1973 and the first invasion of Iraq in 1990 had longer-term repercussions.
The winners of the day were the big players in the arms and defense sector, supported by the renewed tension in the Middle East, notably Lockheed Martin (+8.93%), Northrop Grumman (+11.43 %), General Dynamics (+8.43%) and RTX (formerly Raytheon, +4.62%).
Conversely, cruise lines suffered from the deterioration in the outlook for global tourism linked to the war, such as Carnival (-4.30%) and Royal Caribeean (-2.92%).
The shock wave also hit airlines, which suspended their connections between the United States and Israel this weekend. American Airlines (-4.08%), United Airlines (-4.88%) and Delta Air Lines (-4.65%) were all in the red.
Many Israeli stocks listed in New York benefited from the weekend’s developments, including the generic drug specialist Teva (-6.37%), the integrated circuit manufacturer Tower Semiconductor (-6.61%) and the professional software publisher NICE (-3.69%).
Boosted by the rebound in black gold prices, oil companies were in demand, like ExxonMobil (+3.50%), Chevron (+2.77%) or ConocoPhillips (+5.63%). Mining companies also had the wind in their sails, like The Mosaic Company (+6.80%).
Disney accelerated (+2.12%) after Trian, the company of activist investor Nelson Peltz, strengthened its position in the capital of the entertainment giant, now controlling more than 30 million shares. According to Wall Street JournalMr. Peltz is reportedly preparing to request the appointment of directors to the Disney board, with the intention of reorienting the group’s strategy.