NEW YORK (dpa-AFX) – After the clear price gains at the start of the week, the US stock exchanges took a hit on Tuesday. Both weak economic data from China and the surprising announcement of a special tax for “excess profits” by banks in Italy weighed on the mood. In this gloomy environment, investors switched to safe-haven US Treasuries.
The best-known Wall Street index, the Dow Jones Industrial, fell 0.45 percent to 35,314.49 points. The market-wide S&P 500 fell 0.42 percent to 4499.38 points. The technology-heavy selection index Nasdaq 100 lost 0.87 percent to 15,273.05 points.
Chinese foreign trade, which is important for the US economy, is showing no signs of recovery: after sharp declines in previous months, exports in July fell by 14.5 percent year-on-year in dollar terms. The imports of the second largest economy fell by 12.4 percent. Both values were even worse than expected by analysts. Investors now feared that the weakness in the Chinese economy would spill over into the global economy.
The Italian government hopes to take in “a few billion” euros from the newly introduced 40 percent tax on bank profits, in order to relieve the burden on citizens. Italian banks are currently making big profits due to high interest rates on loans. According to Italy’s Deputy Prime Minister and Lega boss Matteo Salvini, the new measure aims to support families and companies that have been hit hard by inflation and interest rate increases.
The news from Italy put financial stocks under pressure in New York, especially since there was also bad news from Moody’s: The rating agency had downgraded the creditworthiness of ten small and medium-sized US financial institutions and announced that it might do the same for a handful of large companies do. Goldman Sachs shares fell 2.1 percent among the weakest stocks in the Dow. JPMorgan shares fell 0.6 percent.
At the top of the S&P 500, Eli Lilly’s stock soared to a record high, ending up nearly 15 percent. The pharmaceutical company continues to do good business with new drugs such as its diabetes and weight-loss drug Mounjaro. The Management Board therefore once again increased its targets for the full year 2023. The shares also benefited from high price gains in the shares of the competitor Novo Nordisk. The Danes had published positive study data on Mounjaro’s competitor Wegovy to prevent serious cardiovascular problems. Eli Lilly is conducting a similar study.
At the end of the index, shares in International Flavors and Fragrances fell by more than 19 percent. The producer of flavors and fragrances had lowered its sales forecast for the full year due to continued weak demand.
The euro suffered from the gloomy mood on the financial markets and closed on Wall Street at 1.0956 US dollars. The European Central Bank had set the reference rate at 1.0944 (Monday: 1.0984) dollars. The dollar thus cost 0.9137 (0.9104) euros.
On the US bond market, the futures contract for ten-year government bonds (T-Note Future) rose by 0.28 percent to 111.44 points. In return, the yield on ten-year bonds fell to 4.02 percent./la/he
— By Lutz Alexander, dpa-AFX —
2023-08-08 20:39:58
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