The Wall Street subway station (AFP / Angela Weiss)
The New York Stock Exchange ended on a mixed note on Friday, with tech stocks enjoying a rebound while banks dragged down the Dow after a flurry of earnings.
Wall Street’s flagship index lost 0.56%, to end at 35,911.81 points, while the Nasdaq, sucked up by the technology sector, gained 0.59%, to 14,893.75 points and the S&P 500 grabbed 0.08%, to 4,662.85 points.
The day got off to a bad start, with a flurry of disappointing macroeconomic data, primarily retail sales for December.
They fell by 1.9% compared to November, while economists had forecast a virtually stable figure (-0.1%).
To this failure was added the 0.1% decline in industrial production, still in December, while investors were expecting a slight increase of 0.2%.
Last disappointment, the consumer confidence index deteriorated in January (68.8 points against 70.6 in December), according to the survey of the University of Michigan, even beyond what the market expected. (70).
Retail sales “as well as disappointing releases and forecasts from major banks both weighed on the market,” said Brian Prince, chief investment officer for Commonwealth Financial Network.
Most of the banks which published their results on Friday did better than expected, but a slight slowdown at the end of the year and certain cautious forecasts were displeasing.
“The bar was quite high, after the outperformance of the sector in recent weeks,” said Angelo Kourkafas, specialist in investment strategy at the investment company Edward Jones.
Driven by the rise in bond rates, which bode well for an improvement in their margins, bank shares had thus made a good run so far in the first days of 2022.
Investors also winced, he said, at the announcement of a possible increase in costs this year, in particular wages, a consequence of inflationary pressures in the American economy.
“This is something that will have to be monitored” in other sectors, over the publications, warned Angelo Kourkafas.
Inflation remains a major concern, abounded Brian Price, and the poor macroeconomic figures of the day “will not change the opinion of the Fed (American Central Bank)”.
Several members of the Fed’s monetary policy committee have spoken in recent days of upcoming hikes, and the market is betting more than ever on a first hike in March.
Throughout the session, the Dow Jones was kept under water by the banks, namely Goldman Sachs (-2.52%) and JPMorgan Chase (-6.15%), which published a quarterly turnover below expectations.
The establishment also warned that it could miss a key short-term profitability objective.
Also sanctioned, Citigroup (-1.25% to 66.93 dollars), which nevertheless did better than expected on both its turnover and its profit.
Investors focused more on the drop in income from retail banking and market activities.
Only Wells Fargo pulled out of the game (+3.68% to 58.06 dollars) and did much better than expected, with revenues up 13% year on year.
The banking group benefited in part from exceptional items related to the sale of two entities, which boosted revenues by almost a billion dollars.
As for technology stocks, as for banks, the scenario at the start of the year was reversed on Friday, and these high-growth companies were able to regain some lost ground.
The heavyweights of the rating, Microsoft (+1.77%), Apple (+0.51%) or Alphabet (+0.47%), which together weigh more than 7,000 billion dollars in capitalization, have managed to bring the Nasdaq out of its lethargy. The index ended up after moving much of the session in the red.
The Las Vegas Sands casino groups (+14.15% to 42.99 dollars) and Wynn Resorts (+8.60% to 91.47 dollars) soared with the announcements of the Executive Council of Macau on the evolution of gambling legislation in this Chinese territory.
The authorities plan to limit the number of licenses granted to gambling operators to six, which Sands and Wynn benefit from.
Macau also appeared to have backed away from appointing a regulator to oversee day-to-day casino operations.
The manufacturers of vaccines against Covid-19 reacted badly to the blocking by the Supreme Court of the United States of the decision of President Joe Biden to impose the vaccine in companies with more than 100 employees.
Moderna (-2.59%) fell to its lowest level since late June, followed by Pfizer (-1.06%) and Novavax (-1.39%).
Asset manager BlackRock was penalized (-2.19% to $848.60) for missing analysts’ earnings forecast. The group saw its assets under management grow by 15% over one year, to cross the symbolic threshold of 10,000 billion.