Equities New York: Tech values ​​stabilize somewhat – Dow hardly changed | 4/7/22

NEW YORK (awp international) – On the US stock market, technology stocks have only fallen slightly after their recent downturn. On Thursday, the fact that the yield on ten-year government bonds did not rise as much provided some relief. Recently, among other things, it was feared that significantly rising interest rates could increase the financing costs of the very growth-oriented tech stocks. In addition, rising interest rates reduce the current value of the high profits that tech companies want to generate in the future.

Another side effect of higher interest rates is that stocks generally become less attractive compared to less risky assets like bonds. In this respect, investors continued to act cautiously.

The leading index Dow Jones Industrial was last 0.04 percent higher at 34,511.67 points. The broader S&P 500 edged up marginally to 4485.04 points. The tech-heavy Nasdaq 100 fell 0.17 percent to 14,474.31 points.

In the meantime, stockbrokers are expecting capital market interest rates to continue to rise due to the current monetary policy. The previous evening, the minutes of the most recent meeting of the Fed had confirmed its tendency to tighten monetary policy quickly. The background to this is the very high and likely further increase in inflation. The Fed wants to quickly melt down its balance sheet, which was bloated in the wake of the Corona crisis, and does not rule out larger interest rate hikes.

At the top of the S&P 500, the papers of the PC and printer manufacturer HP rose by around 16 percent. Star investor Warren Buffett’s holding company has invested in the computer group on a large scale and is now the largest single shareholder. According to the analyst Samik Chatterjee from the US bank JPMorgan, the relevance of PCs in the context of the hybrid working world has increased since the beginning of the corona pandemic. In this respect, the profitability prospects for the industry are now higher.

Ford shares, on the other hand, lost almost four percent and thus suffered from a skeptical study by the British investment bank Barclays. Despite the recent sell-off, investors continued to underestimate the risks to the auto sector, analyst Brian Johnson wrote. The expert referred to high inflation and production pressure. In the short term, Ford seems to be vulnerable to the ongoing lack of chips./la/zb

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