(New York) The New York Stock Exchange started the last session of the week in decline after a surge in ten-year bond rates which stabilized just below the 5% threshold which had been close to the day before.
The Dow Jones index fell by 0.57%, the NASDAQ, with its strong technological coloring, lost 0.71% and the S index
Yields on the 10-year Treasury note stood at 4.93% around 10:20 a.m. ET after closing at 4.98%. In after-hours trading on Thursday, the ten-year rate briefly touched 5.00% before retreating.
This level is a new high since July 2007.
An ounce of gold gained 0.82% to $1,996.70, a three-month high.
Under pressure from the rise in the bond market, the stock market ended clearly in the red after an up-and-down session on Thursday.
The Dow Jones index fell 0.75% to 33,414.17 points, the NASDAQ lost 0.96% to 13,186.18 points and the S
“Stocks are lower on Friday as investors weigh the state of the economy while awaiting further company results,” commented analysts at Walls Fargo.
On the bond market side, the geopolitical situation should lead to a drop in yields on the eve of the weekend “while the news gives the impression that we are heading towards an imminent ground invasion of Gaza”, estimated Patrick O’Hare of Briefing.com.
Investors continued to digest the words of Jerome Powell, the president of the American central bank (Fed) who on Thursday gave food for thought “to the hawks and the doves”, to use the language of the Fed designating the supporters of high rates and those of a more flexible monetary policy.
“He said inflation was still too high and a slowdown in growth might be necessary to bring it under control,” said Art Hogan of B. Riley Wealth Management.
Powell also noted that the monetary committee was intended to be “cautious,” which may be an indication that the Fed is in no rush to raise rates further, analysts suggested.
Still, “the recent series of good economic figures”, such as the increase in retail sales, “was the primary factor in the rise in yields on Treasury bills”, further affirmed Art Hogan.
On the value side, Tesla continued to lose value (-1.39% to $217) after having already fallen by 9.30% the day before due to disappointing quarterly results.
Then during an audio conference, Elon Musk, the boss of Tesla, blamed at length the rise in interest rates which increases its production costs and hampers credit purchases of its vehicles.
American Express, a Dow Jones heavyweight, lost more than 4% despite better-than-expected quarterly results with revenue up 13% year-over-year in the third quarter. The group reported continued growth in consumer credit spending.
Solar energy stocks were having a bad day in the wake of Israel-based SolarEdge Technologies (-25.86% to $84 around 10:15 a.m. Eastern). The group indicated that it was facing a slowdown in the equipment installation market in Europe.
Other companies in the sector plunged like Enphase Energy (-11.15%) or Sunpower (-9.69%).
