The New York Stock Exchange was trading directionlessly on Wednesday shortly after opening, still unsettled by the bad signals it is receiving from the American economy, with caution prompting many investors to take profits.
At around 1:50 p.m. GMT, the Dow Jones was up 0.07%, the Nasdaq index was down 0.22% and the broader S&P 500 index was close to equilibrium (-0.01%).
Wall Street remained groggy after the blow received the day before, which caused the Nasdaq to lose 3.26%.
Traders are concerned about “the health of the U.S. economy and whether it is slowing faster than just landing,” said Quincy Krosby, an analyst at LPL Financial.
The ISM index released Tuesday showed that manufacturing activity in the United States continued to contract, at a faster pace than expected.
Investors are therefore scrutinizing, more than usual, the slightest American macroeconomic signal to form an opinion.
On Wednesday, they will have to sink their teeth into the Labor Department’s job openings report and, later, the central bank’s Beige Book, which reports on economic conditions on the ground.
But they are especially waiting for the ISM index of activity in services, on Thursday, and, even more, the monthly report on employment, on Friday.
The turmoil on Wall Street was also evident on Wednesday in the microprocessor sector, which has boosted the performance of the entire New York Stock Exchange for two years.
Shaken on Tuesday, the values of this cutting-edge industry remained poorly oriented.
After the close on Tuesday, “there was news about the investigation into Nvidia and a note from UBS on ASML,” Quincy Krosby said.
Nvidia (-0.92%) defended itself on Tuesday against anti-competitive practices after the Bloomberg agency reported an investigation by the American Department of Justice on the subject.
Read more
As for ASML (-3.28%), a major supplier of equipment essential to the manufacture of the most sophisticated chips, it was the subject of a downgrade in recommendation by analysts at the Swiss bank UBS.
The latter believe that the potential for increasing the group’s profits is not as high as the market anticipates.
In this unfavorable context, major American players in the sector remained in the red on Wednesday, notably Broadcom (-0.50%) and Intel (-1.20%).
The VIX index, which measures market nervousness, rose another 9%.
Investors’ feverishness pushed them towards bonds, whose rates were easing.
The yield on 2-year US government bonds stood at 3.83%, compared to 3.86% the previous day at the close. The price of bonds moves in the opposite direction to their rate.
For Quincy Krosby, the correction at the start of the week is also due to “those who have had good results so far (this year) and are telling themselves that they are going to make some profits (by selling shares), simply because we don’t know how the year is going to end.”
Nordstrom was up 1.88% on the stock exchange after the department store chain’s founding family announced a bid to take the group private. They are offering $23 per share, a price lower than the current price ($23.25).
Discount chain Dollar Tree was penalized (-19.17%) for a profit warning. Chief Executive Todd Vasos said many of the chain’s regulars felt “financially constrained.”
Shares in Donald Trump’s media group, TMTG (-1.55%), remained close to their lowest level since its IPO in late March, reached on Tuesday.
Investors are concerned that Donald Trump will sell all or part of his shares after the six-month period following the IPO, as the company allows him to do.
Nasdaq
you/are
