The New York Stock Exchange rebounded on Tuesday, supported by tech stocks and deal-buying investors after seven weeks of losses for the Nasdaq.
In the final results, the Dow Jones index added 1.34% to 32,654.09 points. The Nasdaq Technology Index jumped 2.76% to 11,984.52. The S&P 500 rose 2.02% to 4088.85.
The return of risk appetite was “helped by positive news from China” with more favorable statements from the authorities regarding technology groups and their market quotes, analysts at Wells Fargo said.
Favorable eurozone data also played a role, with a slight upward revision in economic growth, which was +0.3% in the first quarter against +0.2% in the first estimate, these analysts say.
Investors also reacted positively to US retail sales data, which rose as expected by 0.9% in April, suggesting that demand remains strong despite inflation.
But for Meeschaert Financial Services’ Gregory Volokhin, “the retail sales interpretation,” which reflects only part of more service-oriented American consumption, “was positive because we turned a blind eye to inflation.”
Instead, the portfolio manager turned his attention to comments from executives at Walmart, America’s largest retailer, who saw “a bifurcation of the customer base as low-income people turn to unbranded groceries to save money.”
“We’re seeing low incomes really starting to suffer from inflation,” which doesn’t bode well for consumption, added the specialist, who waited several sessions for a stock market rebound before believing it.
The discount supermarket giant also suffered on Tuesday, with Walmart shares shedding 11.38% to $131.35 after a 25% drop in profits and lower guidance for the rest of the year.
Yields on short-term (2-year) bonds jumped to 2.70% from 2.56% after further tough inflation announcements from Federal Reserve Chairman Jerome Powell. Those at 10 also pulled themselves up to a lesser extent, again approaching the 3% mark at 2.98%.
The institution will sharply tighten its monetary terms until there is “clear” evidence of slowing inflation, Powell told the Wall Street Journal.
If inflation doesn’t slow down fast enough, “then we’ll have to be more aggressive,” he said.
Another indicator that reassured investors was the acceleration of industrial production in the US in April in all categories, but, in particular, due to a sharp increase in car production for the second month in a row.
Total output rose 1.1% from March, according to data released by the Fed on Tuesday.
This was much more than expected, as analysts had expected a slowdown from 0.9% growth in March, but expected only +0.5%.
Almost all sectors of the S&P closed higher, especially information technology (+2.91%), materials (+2.86%) and banks (+2.69%).
Twitter is on the losing side for several sessions, and the social network is in the middle of negotiations with Elon Musk, the boss of Tesla, who is running for its takeover, ended in positive territory (+2.49% to 38.32). dollars).
The electric vehicle maker’s title added 5.14% to $761.61.
DIY chain Home Depot (+1.68% to $300.95) reported an increase in sales forecasts (+3%) for the full year.
Citigroup securities were in strong demand (up 7.56% to $51.05) after billionaire Warren Buffett’s Berkshire Hathaway holding acquired a significant stake in the bank.
The fund said it had purchased about 55 million shares of Citigroup worth nearly $3 billion.
Shares of United Airlines rose 7.88% to $46.97. UAL will be able to fly its 52 Boeing 777s again after receiving a green light from the air traffic regulators (FAA).
The company also said it expects a 25% increase in travel demand compared to 2019, before the pandemic.