The New York Stock Exchange recovered on Tuesday due to stocks of technology and investors interested in deals after seven weeks of losses for the Nasdaq.
According to the final results, the Dow Jones index rose 1.34% to 32,654.09 points. The high-tech Nasdaq jumped 2.76% to 11,984.52 points. The S&P 500 rose 2.02% to 4,088.85 points.
The return of the appetite for risk “contributed to the positive news from China” with more positive statements by the authorities about technology groups and their market quotations, analysts at Wells Fargo.
These analysts also noted that favorable data in the euro area also played a role, with a slight revision towards economic growth, which was + 0.3% in the first quarter against + 0.2% according to the first estimate.
Investors also reacted positively to US retail sales, which were expected to grow by 0.9% in April, indicating that demand remains stable despite inflation.
But for Gregory Volokhin of Meeschaert Financial Services, the “retail sales interpretation,” which reflects only part of the more service-oriented U.S. consumption, “was positive because we turned a blind eye to inflation.”
Instead, the portfolio manager noted comments from executives at Walmart, America’s largest retailer, who noted a “bifurcation of the customer base when low-income people turn to unbranded products to save money.”
“We see that low incomes are really starting to suffer from inflation,” which does not bode well for consumption, added the expert, who waited for several sessions of the stock market rebound before believing it.
The discount supermarket giant also suffered on Tuesday: shares of Walmart lost 11.38% to $ 131.35 after a 25% drop in earnings and a lower forecast for the rest of the year.
Yields on short-term (2-year) bonds jumped to 2.70% from 2.56% due to further harsh statements by Federal Reserve Chairman Jerome Powell against inflation. In 10 years, they also decreased to a lesser extent, again approaching the 3% mark at 2.98%.
The institution will sharply tighten its monetary conditions until there is “clear” evidence of a slowdown in inflation, Powell told the Wall Street Journal.
“If inflation is not slowing down fast enough, then we will have to think about more aggressive actions,” he said.
Another indicator that reassured investors was that in April the pace of industrial production in the United States accelerated in all categories, but in particular due to the sharp increase in car production for the second month in a row.
According to data released by the Fed on Tuesday, total production growth was 1.1% since March.
This was much more than expected, as analysts expected a slowdown from 0.9% growth in March and expected only + 0.5%.
Almost all S&P sectors ended higher, including information technology (+ 2.91%), materials (+ 2.86%) and banks (+ 2.69%).
On the Twitter side, which lost several sessions while the social network is at the center of talks with Elon Musk, Tesla boss, who is fighting for its takeover, ended in the green (+ 2.49% to 38.32). dollars).
The title of manufacturer of electric vehicles rose by 5.14% to 761.61 dollars.
DIY Home Depot (+ 1.68% to $ 300.95) announced an increase in sales forecasts (+ 3%) for the whole year.
Citigroup securities were in high demand (+ 7.56% to $ 51.05) after billionaire Warren Buffett’s Berkshire Hathaway acquired a significant stake in the bank.
The fund said it had bought about 55 million shares of Citigroup worth nearly $ 3 billion.
United Airlines rose 7.88% to $ 46.97. UAL will be able to fly its 52 Boeing 777s again after receiving the green light from the FAA.
The company also said it expects demand for travel to increase by 25% compared to 2019, before the pandemic.