Wall Street mostly in the red after a disappointing manufacturing index
The New York Stock Exchange, which had started timidly higher on Monday, hoping for progress in the impasse on the American debt ceiling, continued essentially in the red following an unfavorable economic index.
After the publication of a barometer showing a plunge in manufacturing activity in the New York area, the Dow Jones fell 0.26%, the S&P 500 yielded 0.15% while the Nasdaq was stable (+0, 05%) around 2:05 p.m. GMT.
On Friday the index of star stocks had crumbled by 0.03% to 33,300.62 points, the high-tech Nasdaq had lost 0.35% to 12,284.74 points and the broader S&P 500 index had dropped 0, 16% to 4,124.08 points.
The week had been essentially negative for the second time in a row, with the Dow Jones and S&P 500 both down 0.3% while the Nasdaq nibbling 0.4%.
Time is running out to raise the debt ceiling and allow the United States to borrow more to meet their maturities.
Over the weekend, US Treasury Secretary Janet Yellen sounded a note of hope as she attended a G7 Finance meeting in Japan. “I’m hopeful. I think the negotiations are very active. I’m told they’ve found common ground,” she told the Wall Street Journal on Sunday.
“Speaker Joe Biden, House Republican Leader Kevin McCarthy and other congressional officials plan to meet on Tuesday to discuss spending as the threat of a default looms,” Art Hogan commented. of B. Riley Wealth Management.
For Edward Moya of Oanda, “Joe Biden hopes that Tuesday’s meeting with the Republicans will show progress that will reinforce the idea that the United States will be able to avoid the catastrophic consequences of a default”.
Futures contracts before the opening of Wall Street were clearly in the green, carried by this dose of optimism but the publication of a manufacturing activity index in sharp decline in New York dampened the enthusiasm of traders.
The manufacturing industry in the New York region thus plunged in May, falling to -31.8 points against +10.8 in April, according to the monthly Empire State survey from the New York Fed.
Analysts expected a much less pronounced decline, and saw the index fall to -1.8 only.
– Rates start to weigh –
After an improvement in April, activity fell under the effect in particular of a sharp drop in new orders and employment, the economy slowing down under the effect of rate hikes.
“Manufacturing activity” in this highly industrialized region “plunged in May, showing that inflationary pressures persist while business conditions have deteriorated significantly,” said Edward Moya. “The Fed’s interest rate tightening cycle is starting to hit the economy hard,” he added.
Several U.S. central bank officials are due to speak on Monday and their views on the way forward for monetary policy will be watched by investors, Wells Fargo analysts noted.
On the side, Meta, Facebook’s parent company, kept the Nasdaq out of the water by rising almost 1% after a good analyst rating.
Regional banks, heavily heckled in recent weeks, rebounded 9.89% to 5 dollars for PacWest at 2:00 p.m. GMT, 6% for Western Alliance and 3.5% for Zions Corporation.
Magellan Midstream Partners, operator of oil pipelines, soared 15% to 63.69 dollars after announcing that it had been acquired by the natural gas carrier Oneok for 18.8 billion dollars.
Under the terms of the agreement, Magellan shareholders will receive $25 in cash and 0.6670 Oneok shares for each of their shares. This represents a 22% premium to the May 12 closing price.
The action of Oneok was however the red lantern of the market losing 8% to 58.60 dollars.