Up slightly, Wall Street on course for a positive week

The New York Stock Exchange opened slightly higher on Friday, preparing to end the week in the green encouraged by the hope of a positive outcome on the American debt ceiling.

The Dow Jones index advanced by 0.24%, the technology-dominated Nasdaq gained 0.07% and the S&P 500 by 0.34% around 2:00 p.m. GMT.

The day before, the Dow Jones had appreciated by 0.34%, the Nasdaq index had garnered 1.51% and the broader S&P 500 index had gained 0.94%.

Nasdaq and S&P 500 ended at 12,688.84 and 4,198.05 points respectively, the highest in nearly nine months at the close.

Over the week, at the close of Thursday, the index of flagship stocks has already taken 0.70%, the Nasdaq is up 3.3% and the broader index, the most representative of the market, obtains a weekly gain by 1.8%.

“Some optimism this week around the debt ceiling talks was the catalyst that drove stocks higher,” Briefing.com’s Patrick O’Hare said.

“This optimism is still valid as President Joe Biden and House Republican Leader Kevin McCarthy both reported progress in the talks,” he added.

If the US borrowing limit is not raised by Congress by June 1, the country could default on its debt, a potentially catastrophic event for global financial markets.

The American president, who is currently participating in a G7 in Japan where new sanctions against Moscow have been announced, must return to Washington on Sunday to try to conclude an agreement in principle with the Republican opposition.

Investors will also watch in the morning for an intervention by the Chairman of the American Federal Reserve (Fed) Jerome Powell during a conference on “the outlook for monetary policy”.

“We can suspect that he will try to be neutral by emphasizing that the Fed remains dependent on the data”, speculated Patrick O’Hare.

One of the members of the Monetary Committee, Lorie Logan of the Dallas Fed, however, suggested on Thursday that an additional rate hike could be necessary at the next meeting.

On the bond market, the ten-year rates continued to tend to 3.70% against 3.64% and those at two years rising to 4.33% against 4.25% also carried by the hope of an agreement on the debt which restores to Treasury bonds all their aura of safe haven.

On the rating, Disney lost 1.73% after announcing that it was giving up the construction of a campus for its employees of nearly a billion dollars in Florida while the entertainment group is in full quarrel with the governor of the state, Ron DeSantis.

The retailer Walmart lost 1.35% even though the discount supermarket chain raised its forecast for 2023. The group also admitted that it was attracting more consumers on a budget constrained by inflation, which worries investors on the drive of the American consumer.

On the positive side, the regional banks continued to recover or at least stay in the green: PacWest gained 6.76%, Western Alliance advanced by 0.88% and Zions Bancorporation by 0.59% around 1:45 p.m. GMT.

The CEO of Morgan Stanley Bank (-0.83%) James Gorman, 64, announced on Friday that he intended to resign within the year, which is launching a race for his succession.

Sports shoe retailer Foot Locker slumped 25% as its first quarter results were disappointing and the retailer lowered its full-year earnings forecast.