NEW YORK (dpa-AFX) – The US stock exchanges reacted to the credit rating downgrade of the United States by the rating agency Fitch in the middle of the week, sometimes with high losses. The leading index Dow Jones Industrial lost 0.98 percent on Wednesday to 35,282.52 points. The day before, the Dow had climbed to its highest level since February last year. But now investors took price gains with them.
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Fitch withdrew the coveted top rating for creditworthiness from the USA. The rating was lowered by one step from “AAA” to “AA+”. The agency Standard & Poor’s lowered the rating in 2011. Of the three leading agencies, only Moody’s ranks the USA at the highest level. With weaker credit ratings, a state’s borrowing can become more expensive.
The technology-heavy Nasdaq 100 selection index lost 2.21 percent to 15,370.74 points, significantly more than the Dow. In the US bond market, US government bonds came under pressure after Fitch’s downgrade, while yields rose in return. Tech stocks tend to react to rising capital market interest rates with above-average losses because they are considered highly valued. The market-wide S&P 500 fell by 1.38 percent to 4513.39 points.
“The rating downgrade is a shot across the bow,” wrote Thomas Gitzel, chief economist at VP Bank. The subsidy policy of the US government and the nerve-wracking disputes over the debt ceiling could definitely trigger further downgrades.
According to Gitzel, the step reflects above all the lack of willingness to compromise in the US Congress. While the Democratic camp is increasingly being taken over by the left, the Republicans are drifting towards the right-conservative corner. So there is a lack of impartiality. There is no sign of improvement. So it shouldn’t come as a surprise if the rating agency Moody’s also withdraws the top rating from the USA in the medium term.
Among the individual values, AMD shares were unable to escape the general price weakness in the semiconductor industry and fell by seven percent. The chip group suffered in the past quarter from the weakness of the global PC market. The shares of Nvidia, Micron and Intel also came under pressure.
The world’s largest coffee shop chain, Starbucks, posted significant increases in sales and profits as business in China recovered. The papers increased by almost one percent in the weak overall market.
Electronic Arts shares lost more than seven percent. The game developer’s earnings guidance for the second quarter fell short of market expectations. In addition, the bank UBS canceled the buy recommendation for the shares.
The chemical group Dupont and the food group Kraft Heinz also published quarterly figures. While Kraft Heinz shares gained 1.2 percent, Dupont lost 0.9 percent.
The euro weakened and last traded at $1.0940. The European Central Bank had set the reference rate at 1.0985 (Tuesday: 1.0970) dollars. The dollar thus cost 0.9103 (0.9116) euros.
On the US bond market, the futures contract for ten-year government bonds (T-Note Future) recently fell by 0.01 percent to 110.88 points. The yield for ten-year bonds was 4.07 percent./bek/he
— By Benjamin Krieger, dpa-AFX —
Source: dpa-AFX
2023-08-02 20:17:00
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