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Wall Street worried about monetary tightening



(New York) The New York Stock Exchange opened lower on Thursday, unable to extend the rebound that began on Tuesday, the market being still concerned about the continuation of monetary tightening and scalded by bad corporate news.

Around 10:10 am (Eastern time), the Dow Jones yielded 1.18%, the NASDAQ index dropped 2.15% and the broader S&P 500 index dropped 1.50%.

“We are still in a downward trending market,” commented Adam Sarhan of 50 Park Investments. Wall Street “needs a catalyst to pull it up, but it doesn’t know where to find it.”

For Patrick O’Hare, of, the New York market took a hard time the upward revision of the American growth estimate for the third quarter, to 3.2% at an annualized rate against 2.9% previously , while economists expected a status quo.

“This fuels concerns about monetary tightening by the Fed” (US central bank), which could continue, explained the analyst, in a note.

Wall Street was also unpleasantly surprised by several communications from companies, which reported a deterioration in economic conditions.

Among them is the used car sales network CarMax (-8.05% to 54.59 dollars), which is facing a deceleration in the sector and has published results below expectations.

The semiconductor manufacturer Micron (-3.96% to 49.17 dollars) also announced Wednesday results below expectations, with sales down 38% and a net loss.

The group is suffering from a slowdown in demand for microchips, particularly for smartphones, and plans to cut its workforce by around 10% in 2023.

The announcements of savings plans are multiplying, like that of the courier group FedEx, which announced Tuesday new cost reduction measures to the tune of a billion dollars in a full year.

According to the Wall Street Journal, the American agrifood giant Tyson Foods is also preparing to cut hundreds of jobs with the closure of two sites.

“People are anxious because they are starting to see more and more job cuts, while inflation is still very high and the Fed continues to raise its rates,” says Adam Sarhan. “There’s not a lot of positive, not a lot of hope” in the market right now.

Micron’s pessimistic rhetoric cast a chill over the entire tech industry. Among the most affected titles, the graphics card manufacturer Nvidia (-5.55%), Microsoft (-2.75%) and Meta (-2.54%).

In tune, Tesla resumed its slide (-3.34% to 132.98 dollars). The electric vehicle maker’s stock fell Thursday to its lowest level in more than two years. Due to the melting of the course, the fortune of Elon Musk, its boss and main shareholder, has been almost halved since the beginning of the year.

The AMC cinema chain (-14.33% to 4.54%) tumbled after unveiling, Thursday before the stock market, a capital increase of 110 million dollars fully subscribed by the investment company Antara Capital. The latter also agreed to convert into shares 100 million dollars of AMC debt securities that it already held.

The operation will cause a significant dilution of existing shareholders, hence the fall of the title, darling of many individual investors.

Airlines were suffering from the arrival of a winter storm that was expected to affect most of the United States, particularly the north-central, in the midst of major travel for the holidays.

Hundreds of flights have already been canceled Thursday, in particular from or to the two airports of Chicago (Illinois) and that of Denver (Colorado), according to the specialized site FlightAware.

Delta (-1.43%), Southwest (-1.49%), United Airlines (-2.00%) or even American Airlines (-2.76%) were all in the red.

The Cleveland-Cliffs metallurgical group jumped (+ 10.91% to 16.78 dollars) after indicating that the prices already negotiated for its steel to be produced in 2023 were higher than those of 2022.

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