The New York Stock Exchange fell at the opening Thursday, in the wake of European stock markets, fearing that the coronavirus variants could slow the global economy.
At 14:00 GMT, the Dow Jones index lost 1.27% to 34,130 points, the high-tech Nasdaq dropped 1.40% to 14,594.50 points and the S&P 500 widened index dropped 1.34% to 4,291 , 25 points. The day before, Wall Street had risen slightly.
“The market is on the defensive”, commented Peter Cardillo, chief economist of Spartan Capital Security, citing two factors.
One is “the fear of the variant (Delta) of the coronavirus. The market is seized by the fear that the activity of the world economy will slow down” because of the return in intensity of the epidemic, explained the analyst. to AFP.
Japan declared a state of health emergency in Tokyo on Thursday for the Olympics. Australia, where nearly half of the population is subject to containment measures, has announced more restrictions on entering the continent.
Nervousness
The other factor explaining investor nervousness “is the fact that the Fed mentioned the slowdown in asset purchases” in its minutes published on Wednesday, which reported on its last monetary meeting on June 15 and 16, underlined M Cardillo.
“Although it is not yet in sight, investors are hinting that Fed Chairman Jerome Powell may announce these measures at the annual conference in Jackson Hole (Wyoming) at the end of August”, underlined Mr. Cardillo.
However, the yields on the 10-year US debt did not seem to worry about the prospect of a decrease in the institution’s monetary support.
Instead of tightening, they fell to 1.28% against 1.31% the day before, which left analysts puzzled: “the level of rates is not consistent with a strengthening of the economy (…) nor with the risk of inflation above 2% in the long term”wondered Kathy Jones, Schwab fixed income strategist.
A disappointing indicator on the employment front also surprised the markets. Weekly claims for unemployment benefits are on the rise in the United States, contradicting expectations. Some 373,000 people are newly registered as unemployed, 2,000 more than the week before, and 23,000 more than analysts expected.
Among stocks, airlines fell, reflecting fears of the extension of the pandemic, such as Delta Airlines (-2.14%) or United (-2.01%). The Carnival cruise line dropped 3.65%.
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