(New York) The New York Stock Exchange indices ended sharply higher on Tuesday for the first time in three sessions, driven by corporate earnings announcements even though bond yields continued to climb.
Updated yesterday at 5:09 p.m.
According to final results at the close, the Dow Jones index rose 1.45% to 34,911.20 points. The tech-heavy NASDAQ gained 2.15% to 13,619.66 points. The S&P 500 rose 1.61% to 4462.21 points.
The NASDAQ remains 16% below its highest level at the end of 2021, while the S&P 500, which is more representative of the American stock market as a whole, is down 7%.
“I believe this is a relief rally, as there is a breath of optimism anticipating the return of consumer spending in the summer, travel, the end of mask wearing”, said Maris Ogg of Tower Bridge Advisors.
In the United States, a court decision lifted the obligation to wear a mask against COVID-19 on public transport, prompting its immediate application on planes.
“But this rebound could be short-lived,” warned the portfolio manager. “As Europe risks recession, as Chinese growth slows down, I do not see how the United States will avoid this slowdown”, continued Mr.me Ogg.
The International Monetary Fund (IMF), which released its global economic forecast on Tuesday, sharply lowered its global growth projection for 2022 due to “seismic waves” caused by the war in Ukraine and warned that inflation was set to rise. last.
Growth is expected to come in at 3.6% this year, down 0.8 percentage points from its January projections.
With regard to inflation, the Fund now expects 5.7% this year for advanced countries (+1.8 points) and 8.7% (+2.8 points) for emerging and developing economies.
Bond rates on ten-year US Treasury bills easily crossed the 2.90% mark for the first time since the beginning of December 2018, at 2.93% against 2.85% the day before.
A member of the monetary committee of the American central bank (Fed), James Bullard, estimated on Monday that a 75 basis point (0.75%) hike in Fed rates was not out of the question. The market level already reflects the factoring in of a rate hike of half a percentage point on May 4th.
A good real estate indicator, with an unexpected jump in housing starts in March, at the fastest pace since 2006, supported the indices.
And a salvo of rather positive corporate results also restored confidence on Tuesday to investors looking for bargains.
Pharmaceuticals group Johnson & Johnson (J&J), a member of the Dow Jones, jumped 3.24% to $183.41 as its quarterly revenue and profit came in better than expected.
But the COVID-19 vaccine maker suspended sales forecasts for its serum, which has lower demand than vaccines from Moderna and Pfizer.
The American investment fund Blackstone (+4.96%) has announced the acquisition of American Campus Communities (ACC), the largest developer, owner and manager of student housing in the United States, for nearly 13 billion dollars.
The action of ACC, a group that has 166 properties in more than 70 American universities, jumped 12.45% to 64.75 dollars.
Twitter dropped 4.71% to 46.17 dollars after press reports that the Apollo Global Management fund (+3.33%) would be interested in participating with Elon Musk in the hostile takeover bid by the boss of Tesla (+ 2.38% to 1028.15 dollars) on the social network.
US defense group Lockheed Martin reported weaker first-quarter revenue on Tuesday, hurt by supply chain issues, and left its full-year guidance unchanged. The group’s stock, which rose after Russia invaded Ukraine, fell 1.6%.
Announcing results that show a loss of 200,000 subscribers in the first quarter, Netflix plunged 23% to $267.34 in electronic trading after the close.
The Toronto Stock Exchange closed higher on Tuesday, although the energy and materials sectors fell, undermined by the downward revision of the economic forecasts of the International Monetary Fund (IMF) due to the Russian invasion of Ukraine and pandemic lockdowns in China.
The Toronto floor’s S&P/TSX Composite Index advanced 140.41 points to end the session with 22,018.82 points.
In the currency market, the Canadian dollar traded at an average rate of 79.20 US cents, down from 79.25 US cents the day before.
On the Commodities Exchange, the price of crude oil fell US$5.56 to US$102.05 a barrel, while that of natural gas fell US64.4 cents to US$7.18 a million. of BTUs.
The price of gold returned US$27.40 to US$1955.80 an ounce and that of copper depreciated 8.4 cents US to US$4.72 a pound.