NEW YORK (awp international) – New hopes for a slower rise in interest rates and good corporate news led to a significant recovery in US stock exchanges on Monday. The leading Dow Jones Industrial Index closed 1.86% higher at 30,185.82 points. Eventually, the market-wide S&P 500 rose 2.65% to 3677.95 points. The Nasdaq 100, which is studded with tech stocks, even gained 3.46% to 11,062.53 points, which meant the highest daily gain percentage since July 27.
The US stock market then continued its recent zigzag course, which had brought it to a severe setback after stabilizing Thursday before the weekend. Technological values in particular had fallen again on Friday.
Industrial sentiment in New York state surprisingly worsened significantly in October, as the current Empire State Index shows. Placed below the zero line, the indicator signals a decline in economic activity. In recent months, the mood in companies has tended to deteriorate. The background is likely the war in Ukraine, significantly higher energy prices and ongoing problems in world trade. According to the New York Regional Central Bank, companies currently do not expect general conditions to improve in the next six months.
“Currently, the equity markets are saying that negative US economic data is providing a good impetus for equity trading,” commented expert Andreas Lopkow. The steep decline in the Empire State Index is used as a possible reason why the Fed raises interest rates more slowly. “It is doubtful that this will actually be the case,” Lipkow continued. “It helps (but) to find a reason to buy, at least temporarily, at the currently oversold level of US stock indices.” In addition, some better-than-expected quarterly reports raised the mood.
At the beginning of the new week, the data series of the major American banks entered the second round. Bank of America surprised on the upside as it weathered the economic turmoil in the third quarter better than experts expected. Despite the high provisions, the bank only made a slightly lower profit than in the same period last year. The shares were up about six percent. Shares of Bank of New York Mellon were up about 5% – earnings exceeded expectations despite a decline.
Shares of US biogas producer Archaea Energy even jumped by more than half to nearly US $ 26 thanks to the upcoming takeover by BP. Archaea’s management around CEO Nick Storck accepts the deal, including the debt, which is worth approximately US $ 4.1 billion, for which the UK oil and gas company wants to put around US $ 26 per share in cash on the table . BP shares had lost 1.2% in London against the friendly market.
The possible reunification of media companies News Corp and Fox Corp had a divided answer: While News’ shares rose two and a half percent, Fox newspapers fell nearly 8 percent. According to both companies, media mogul Rupert Murdoch intends to merge them. His family trust holds approximately 40 percent of the voting shares of both companies. The merger could save costs and the larger company could more easily open up new business areas like sports betting across multiple media channels, he said.
Shares in New York-listed Chinese companies benefited from statements by Chinese President Xi Jinping, who pledged his support. Newspapers from Internet company JD.com and industry colleague Amazon Alibaba each increased by about five percent. Xi showed no signs of deviating from his zero-Covid policy at the Communist Party conference. However, economic recovery continues to have top priority, the party and the head of state said. He has also pledged support to tech companies.
The euro has visibly benefited from investors’ risk appetite and most recently climbed to $ 0.9837 in New York trading. The European Central Bank (ECB) had set the reference rate at 0.9739 (Friday: 0.9717) dollars; the dollar therefore cost € 1.0268 (1.0291).
In the US bond market, early gains melted in the face of strong equity markets. The 10-year Treasury futures contract (T-Note Future) was for a 0.10 percent rise to 110.70 points. The yield on ten-year government bonds was 4.02 percent / gl / he
— By Gerold Löhle, dpa-AFX —
