Wall Street ends up, despite poor indicators

(New York) The New York Stock Exchange closed higher on Friday, determined to move forward despite poor indicators and mixed results.

The Dow Jones Industrial Average rose 0.62%, the NASDAQ Index rose 0.63% and the broader S&P 500 Index gained 0.55%.

“It looks like yesterday’s pullback was a one-off,” said Adam Sarhan of 50 Park Investments. “It didn’t trigger a selloff.”

Wall Street greeted with phlegm the publication of the PPI producer price index, which came out at 0.2% over one month in June, against 0.1% announced by economists.

Chris Low of FHN Financial noted that most of the increase was in business services, a volatile category that is not representative of the broader economy.

For Adam Sarhan, this disappointment was not enough to offset the good surprise of the consumer price index CPI, Thursday.

Traders also paid little attention to the University of Michigan’s consumer sentiment survey. The confidence index fell to 66 points, its lowest since November, well below the 68.2 predicted by economists.

“Although consumers expect inflation to slow, they are strongly expressing frustration with its persistence,” the survey’s authors noted.

“Those numbers looked pretty awful,” said Steve Sosnick of Interactive Brokers, “but the market is very good at adjusting. If the economy is doing well, it’s good for earnings. If the economy is doing badly, it’s also good because we’re probably going to get rate cuts.”

Investors were encouraged in this direction by a further easing of bond rates. The yield on 2-year US government bonds fell to 4.44%, its lowest level in four months.

The last obstacle overcome was the results of three major banks in the market. While they all came out above expectations, Citigroup (-1.81%) and JPMorgan Chase (-1.21%) saw their bad debts increase significantly.

In addition, the second and Wells Fargo (-6.02%) raised their operating cost forecasts for the entire financial year.

“It’s not enough to exceed expectations anymore,” Sosnick said. “You have to do a little better.”

But the operators had put their rose-colored glasses back on and raised the indices.

Steve Sosnick insisted on the good performance of the Dow Jones but especially of the Russell 2000, an index grouping 2000 SMEs, which rose on Friday to a peak of the year after being clearly neglected in the first half of the year.

This sign of a broadening buying movement on Wall Street reassures investors, who were worried that New York’s gains had been limited, until now, to a handful of technology stocks.

On the stock market, Tesla rebounded (+2.99%) after its fall the day before, triggered by information from the Bloomberg agency according to which the manufacturer will postpone the launch of its robotaxi from the beginning of August to October.

The stock did not suffer from a note from UBS, whose analyst Joseph Spak considered that the surge in price was excessive, as it was fueled, for the most part, by hopes of seeing the group profit from artificial intelligence.

Delta Air Lines lost further altitude (-3.05%), weighed down by the melting of its profits, against a backdrop of overcapacity in the airline sector compared to demand. United Airlines (-2.02%) and American Airlines (-0.47%) also marked time.

Telephone operator AT&T (-0.27%) ended in the red after the announcement that hackers had accessed data from “virtually all” of its customers, although the information actually recovered was limited.

A source close to the case confirmed to AFP that the hackers had gained access to the data through the cloud computing specialist, Snowflake (-1.76%), an AT&T service provider.