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NEW YORK (awp international) – The US stock exchanges closed with significant gains on Thursday. They benefited from growing hopes of a less rigid monetary policy and positive news from the banking sector on both sides of the Atlantic.
The leading index Dow Jones Industrial picked up after initial losses and said goodbye to an increase of 1.17 percent at 32,246.55 points. The other indices were even stronger: the market-wide S&P 500 gained 1.76 percent to 3960.28 points and the Nasdaq 100, which contains many interest-sensitive technology stocks, even jumped 2.69 percent to 12,581.39 points.
As expected, the European Central Bank (ECB) raised the key interest rate by 0.5 percentage points. Analyst Ulrich Wortberg from Landesbank Helaba pointed out that the ECB had not committed itself to further increases in its accompanying statement. “All in all, it seems that the monetary authorities could exercise more restraint and reduce the pace of interest rates.” According to analyst Konstantin Oldenburger from the trading company CMC Markets, investors are even expecting a pause in interest rates in the future, despite persistently high inflation.
Market participants in the USA are also hoping for the same when the interest rate decision by the US Federal Reserve is due next week. The analysts at the Japanese financial group Nomura recently even brought up the possibility of an interest rate cut.
In Europe’s banking sector, the news that the Swiss central bank is helping the ailing major bank Credit Suisse with a multi-billion credit line provided support. In addition, the US regional bank First Republic, which got into difficulties as a result of the recent turbulence in the financial sector, is receiving support from the largest American financial institutions with a total volume of 30 billion US dollars.
The recently shaken First Republic shares honored the news with a price increase of 10 percent. The shares of the industry giants JPMorgan and Goldman Sachs from the Dow as well as Bank of America , Citigroup , Morgan Stanley and Wells Fargo also increased.
Away from the financial sector, shareholders in Snap and Meta enjoyed premiums of 7.3 and 3.6 percent. Shares in the company behind popular photo app Snapchat and Facebook parent benefited from media reports that the US government is once again seeking a change of ownership for popular video app Tiktok. The “Wall Street Journal” and the website “The Information” wrote, among other things, that they demand that Chinese shareholders get out. Concerns about national security were given as the reason. After the EU Commission, the British government also banned the app on company cell phones on Thursday.
Adobe’s titles rose by almost 6 percent after the software company presented annual figures and gave an optimistic sales outlook according to JPMorgan.
The euro was able to recover a little from its mid-week slide. After violent price fluctuations in reaction to the interest rate hike by the ECB, the common currency recently cost 1.0614 US dollars in New trading. The ECB had set the reference rate at 1.0595 (Wednesday: 1.0549) dollars and the dollar thus cost 0.9438 (0.9480) euros.
After initial gains, US government bonds turned negative with the strengthened stock markets. The futures contract for ten-year bonds (T-Note Future) lost 0.72 percent to 114.30 points. In return, the yield on ten-year government bonds rose to 3.59 percent./gl/jha/
— By Gerold Löhle, dpa-AFX —
