Wall Street ends higher, overcoming tough tech results

published on Friday, October 28, 2022 at 10:59 pm

The New York Stock Exchange ended higher on Friday, hopes of a change by the American central bank (Fed) outweighing the poor results of the technology sector.

The Dow Jones gained 2.59%, the Nasdaq index gained 2.87% and the broader S&P 500 index gained 2.46%.

The session, like the week, was “a standoff”, with “on the one hand, the disappointing results of the giant tech caps and, on the other, signs of a softening economy and the growing hope of a Fed tapering,” said Angelo Kourkafas of Edward Jones.

Alphabet on Tuesday, then Meta on Wednesday, and finally Amazon on Thursday all surprised Wall Street badly, “but the market didn’t go down much, and even ended up recovering,” said LBBW’s Karl Haeling .

“Most of the damage was confined to the technology sector and did not spread to the rest of the market,” he continued.

The analyst also noted that the financial system saw this week net inflows of money into equity investment funds, reflecting a renewed investor appetite for this market.

Another strong marker, according to Karl Haeling, the S&P 500 crossed, on the rise, an important technical threshold (the average of the last 50 sessions) and did not fall.

The momentum was such that on Friday even though the technology sector finished in the green, Amazon was the only bad student (-6.80% to 103.41 dollars).

The American distribution giant recorded a 9% drop in net income in the third quarter and forecasts anemic growth by its standards, between 2% and 8% year-on-year in the fourth quarter, a key period of fiscal year because it includes the end. of the celebrations of the year.

Apple (+7.56% to 155.74 dollars) softened the somewhat gloomy picture painted by the other four tech giants this week. It posted higher-than-expected revenue and earnings on Thursday, though iPhone sales missed the mark.

Unlike its competitors, the apple group also maintained its margins and showed cautious optimism for the current quarter.

For Angelo Kourkafas, the macroeconomic indicators of the week confirmed that the economy is in a cooling phase, particularly those related to October, the most recent phase, such as the PMI indices that revealed that activity is retreating in the States -United.

Therefore, it seems “reasonable” to think that “the end of the cycle of monetary tightening is in sight”, according to the analyst, to the delight of traders.

Although they rose on Friday, bond yields fell this week, signaling a shift in investor expectations, after 12 consecutive weeks of increases, a streak not seen in nearly 40 years.

On the side, there is no sign of Twitter, whose list was suspended on Friday after the formalization of the acquisition of Elon Musk. The New York Stock Exchange said it expects to delist after buying back all shares at $54.20 per share, slightly better than the last price ($53.70).

Tesla, of which Elon Musk is the boss, rose 1.52% to $228.52.

ExxonMobil (+ 2.93% to 110.70 dollars), which reached its historical record in the previous day’s session, remained ahead after publishing a quarterly net profit that exceeded analysts’ expectations, although its turnover came out below forecasts.

The group took advantage of high oil and gas prices, and produced the largest volume of refined products in 14 years.

Its competitor Chevron (+1.17% to 179.98 dollars) did better, falling short of market estimates, with net income almost doubling in a year. The San Ramon (California) group dramatically increased its six-fold international refining revenues.

Buoyed by general enthusiasm, Intel (+10.66% to 29.07 dollars) rose despite falling turnover in the third quarter and lowering its forecasts for the year.

Colgate-Palmolive advanced (+1.93% to 74.64 dollars), after announcing results generally in line with expectations, but marked by a compression of its margins and an increase in its costs. The cleaning and maintenance products group has, moreover, slightly revised its forecasts for the full year.


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