Wall Street in dispersed order, the indicators confirm the strength of the American economy

The New York Stock Exchange moved in dispersed order Thursday shortly after the opening, its concerns reinforced by two new indicators showing the intact vigor of the American economic activity, as well as by a new rise in bond rates.

Around 3:05 p.m. GMT, the Dow Jones rose 0.28%, the Nasdaq index yielded 0.43% and the broader S&P 500 index dropped 0.33%.

Already sluggish, the New York market did not welcome the drop in weekly jobless claims, to 190,000 against 192,000 the previous week and 197,000 expected.

“Listings continue to tell the same story that the job market remains too tight to help slow inflation and help the Fed,” Vanden said in a note. Houten of Oxford Economics.

Wall Street was also scalded by the 3.2% jump in the average cost of labor in the fourth quarter of 2022, according to data released Thursday by the US Department of Labor, when economists predicted 1.4%.

“This is pushing bond yields higher,” observed Spartan Capital’s Peter Cardillo, who expects “another mixed, or negative, session.”

In the process, the yield on 10-year US government bonds reached 4.08%, against 3.99% the day before closing, the highest for nearly four months.

The one-year rate, which better reflects medium-term monetary policy expectations, climbed to 5.0689%, a first in more than 22 years.

This new surge in rates “puts stocks under pressure”, noted Peter Cardillo.

“The concern of the moment is linked to the rise in rates, which should go higher and stay higher for longer than expected,” recalled Patrick O’Hare of Briefing.com in a note.

The Dow Jones was to stay in the green at the customer relationship software specialist Salesforce (+11.93%), which jumped after the publication of quarterly results that exceeded expectations and ambitious forecasts, including a marked improvement in margins.

To a lesser extent, so-called defensive stocks, i.e. stocks theoretically less sensitive to the economic situation, also provided support, such as Procter & Gamble (+0.98%) or Coca-Cola (+ 0.76%).

The Nasdaq was undermined by several technology stocks, very sensitive to rising rates, which conditions the financing of their growth. Semiconductor makers Qualcomm (-1.57%), AMD (-1.33%) and Texas Instruments (-0.69%) were among the hardest hit stocks.

Tesla was backtracking (-5.12%), the day after a presentation to investors deemed disappointing for lack of concrete announcements. The manufacturer has not presented a new vehicle, confining itself to promising the arrival on the market of its Cybertruck pick-up by the end of the year.

The department store chain Macy’s (+12.09%) benefited from a quarterly net profit above expectations, the turnover being in line with expectations.

Silvergate Capital, parent company of Silvergate Bank, often called “crypto bank” because it is very popular with players in this sector, was in dire straits (-40.65%). The group announced on Wednesday evening that recent developments in this market could affect its financial strength and mentioned a possible cessation of payments in the coming year.

The chain of electronics stores Best Buy rose (+1.10%), helped by a quarterly profit above estimates, and despite sales and profit forecasts for its staggered financial year (which will end end of January 2024) below analysts’ expectations.

Blackstone was heckled (-2.37%) after the Bloomberg agency reported that the investment company had defaulted on a debt maturity linked to a Finnish property manager, which it has controlled since 2017.