(Washington) The New York Stock Exchange ended the week at half-mast, with investors making position adjustments before the end of the year, in a market with reduced trading.
Posted at 4:24 p.m.
Updated at 6:07 p.m.
The Dow Jones fell 0.77%, the NASDAQ index lost 1.49% and the broader S&P 500 index dropped 1.11%.
“Today’s drop took people by surprise,” Steve Sosnick, of Interactive Brokers, commented to AFP, adding that “the sales affected all sectors” without “there being any there is a particular catalyst.
“As we approach the end of the year, (investors) have made last-minute position adjustments,” according to Peter Cardillo of Spartan Capital.
Mr. Sosnick, however, clarified that “the fall may seem more abrupt than usual, in part because trading volumes are low” during this holiday season. This can lead to high volatility of the indices, both upwards and downwards.
The rise in bond rates may also have “slowed down the market,” Mr. Cardillo said.
On the bond market, the yield on 10-year US government bonds rose to 4.62%, compared to 4.58% the day before at closing.
The market seems, in all cases, to have missed a “Santa Claus rally”, the period of the last five sessions of the year which, in general, favors investors.
In the value table, all the main sectors finished in the red and “the losses of large caps weighed on the entire market,” observed Patrick O’Hare of Briefing.com in a note.
The “Magnificent Seven”, the nickname given to the big names in the technology sector, all declined, like Alphabet (-1.55%), Amazon (-1.45%), Nvidia (-2.09 %), Tesla (-4.95%) or Apple (-1.32%).
Palantir (-3.73%) or Super Micro Computer (-5.22%) were also among the stocks that pulled the indices down.
Energetic stocks, which had managed to keep their heads above water at the start of the session, were the least affected by the day’s downward movement, like ExxonMobil (-0.01%), Chevron (+0.01%), ConocoPhillips (+0.03%) or even EOG Resources (+0.49%).
Bitcoin continued its fall, dragging down cryptocurrency players like MicroStrategy (-3.24%), Coinbase (-3.17%), Robinhood (-3.37%) and Riot Platforms (-4.85%).
Around 4:40 p.m., the star of digital currencies fell 1.21% to $94,535.
The agri-food giant Lamb Weston, considered the largest producer of fries in the world, gained ground (+2.63%) after falling by more than 20% last week following the publication of a surprise loss and the drastic lowering of its annual forecasts.
The Japanese automobile giant Honda advanced 1.37%, still driven by the opening at the start of the week of negotiations on a possible merger with its compatriot Nissan.
Their objective is to combine their forces to negotiate the strategic shift towards electric, dominated by the American Tesla and Chinese groups, BYD in the lead.
Toronto closes lower
The Toronto Stock Exchange closed Friday’s session down 0.20%, led by losses in the technology sector, while U.S. stock markets also fell.
The Toronto trading floor’s S&P/TSX composite index fell 50.42 points to 24,796.40 points.
In New York, the Dow Jones industrial average plunged 333.59 points, or 0.77 percent, to 42,992.21 points, while the broader S&P 500 index lost 66.75 points, or 1. 11%, at 5970.84 points. The NASDAQ Composite Index slipped 298.33 points, or 1.49%, to 19,722.03 points.
All markets recorded larger losses at the start of the day before seeing some recovery at the end of the session.
In Toronto, the information technology index weakened the most at 0.92%, while utilities and industrial stocks also fell.
In the United States, big tech names fell, including Nvidia, down just over 2%, and Microsoft, sliding 1.7%.
The losses likely have more to do with year-end rebalancing than any specific sector outlook, according to Mike Archibald, vice-president and portfolio manager at AGF Investments.
“Given the good performance of stocks this year, there will certainly be some profit-taking by large pension funds, institutions and other clients, probably to rebalance,” he says.
“I don’t think there’s anything too nefarious about today’s movement. This is simply a little profit taking by some of the big winners. »
This trend explains why the pressure is particularly visible on the seven technology stocks that contributed to substantial gains during the year.
Besides big tech stocks, other more speculative bets, like bitcoin and small-cap stocks, have also seen a pullback recently, showing a potential easing of risk appetite, Archibald says.
“Over the last couple of weeks, we’ve seen a slight reversal in some of these assets, so we continue to monitor them because they can be a bit indicative of short-term trading trends,” he says.
“So we’ll see what that means as we move toward 2025.”
On the currency market, the Canadian dollar traded at an average rate of 69.37 US cents, down from 69.51 US cents on Tuesday.
Gold prices fell US$22 to US$2,631.90 per ounce and copper prices fell less than US$1 cent to US$4.12 per pound.
The Canadian Press
