(New York) The New York Stock Exchange ended mixed on Wednesday, but the NASDAQ and S&P 500 managed to reach new closing records in a sparsely attended market that welcomed new signs of a slowdown in US economic activity.
The NASDAQ gained 0.88% and the S&P 500 index gained 0.51%, while the Dow Jones lost 0.06%. This is the 35e record closing high for the S&P 500 since the start of the year.
The session was shortened by three hours because of the proximity of the July 4 holiday on Thursday, when Wall Street will be closed before reopening on Friday.
Wednesday was marked by the publication of a series of macroeconomic data, all of which showed a slowdown in the American economy.
For Quincy Krosby, an analyst at LPL Financial, with the accumulation of degraded data in recent weeks, the market expects the American central bank (Fed) to put more emphasis on full employment in its communication.
The latter is one of the Fed’s two priority missions, along with controlling inflation.
Preserving employment could prompt the institution to ease the monetary pressure currently in place and to lower its rates soon, which the New York market would view favorably.
For Art Hogan, an analyst at B. Riley Wealth Management, that sentiment was fueled by comments Tuesday from Fed Chairman Jerome Powell, who hailed progress in fighting inflation.
“The market tone has changed with regard to a rate cut in September,” which seems almost a given for operators, he reported.
According to the ADP consultancy, the private sector created 150,000 jobs in June, significantly less than the 165,000 expected by economists.
As for new weekly unemployment registrations, they have increased again.
In the latest snapshot of the U.S. economy, the ISM index of service activity fell to 48.8 in June from 53.8 in May. It indicates a contraction, while economists had expected the sector to remain in strong expansion (52.7).
“This is potentially a red flag about the growth trajectory,” High Frequency Economics analyst Rubeela Farooqi said in a note.
In this environment, bond rates have pulled back. The yield on 10-year US government bonds stood at 4.35%, compared to 4.43% the previous day at the close.
The easing of bond rates supported the stock market, Art Hogan stressed.
However, “volumes are abysmal”, in the absence of many operators who are already taking advantage of the long weekend, “so we should not read much into the market movements between now and next week”, warned the analyst.
On the stock market, semiconductors held the reins of the NASDAQ, as has often been the case over the past two years, whether it was Nvidia (+4.57%), Broadcom (+4.33%) or Micron (+3.19%). The index was also driven by Tesla (+6.54%), still on Tuesday’s momentum, after the announcement of better-than-expected quarterly sales figures in the United States.
The stock has gained nearly 50% since a low in early June.
Paramount Global rose (+6.90%) after several American media reported an agreement to buy the entertainment group’s controlling holding company, National Amusements, by Skydance Media, which notably produced the series Impossible mission.
In a second step, Skydance would merge its activities with those of Paramount Global, which has been looking for a partner for many months.
The board of directors of Southwest Airlines (+1.57%) has put in place a mechanism, called a “poison pill”, to counter the increase in capital of the alternative investment company (hedge fund) Elliott, which already controls 11% of the company’s shares.
Southwest will grant holders a right to acquire additional shares if a shareholder exceeds the 12.5% threshold, which would dilute Elliott’s stake.
Toronto Stock Exchange
Canada’s main stock index rose 1.2 percent Wednesday in broad-based gains, while U.S. stock markets were mixed in a session shortened by the July 4 holiday the following day.
The S&P/TSX composite index rose 269.87 points to 22,223.67.
In New York, the Dow Jones industrial average fell 23.85 points to 39,308.00. The S&P 500 index rose 28.01 points to 5,537.02, while the NASDAQ composite index gained 159.54 points to 18,188.30.
On the currency market, the Canadian dollar was trading at 73.33 US cents, up from 73.01 US cents on Tuesday.
On the New York Commodity Exchange, crude oil prices rose seven cents to $82.88 per barrel, while natural gas prices fell two cents to $2.42 per million BTU.
The gold contract rose $36.00 to $2,369.40 an ounce and the copper contract gained 11 cents to $4.53 a pound.
The Canadian Press