Wall Street opens lower, nervousness still hovers

The New York Stock Exchange opened lower on Thursday, looking for direction as the specter of contagion within the banking sector lingers, as illustrated by the further slide of several regional institutions.

Around 1:50 p.m. GMT, the Dow Jones lost 0.74%, the Nasdaq index yielded 0.25% and the broader S&P 500 index fell by 0.44%.

Thursday promises to be “like the box of chocolates from + Forrest Gump +: you never know what you’re going to come across”, dared Patrick O’Hare, analyst at Briefing.com, in reference to the film by Robert Zemeckis.

Clearly in the red for most of Wednesday’s session, Wall Street had recovered before the close thanks to announcements of an intervention by the Swiss authorities to contain the crisis of the banking giant Credit Suisse.

“We were able to get up yesterday (Wednesday), but we will need a little more clarity today (Thursday)” to move forward, warned Art Hogan, of B. Riley Wealth Management.

After a series of brutal movements, the bond market stabilized on Thursday, which helped to calm still nervous investors.

The yield on 10-year US government bonds stood at 3.42%, against 3.45% the day before, while the 2-year rate rose slightly, to 3.92%, against 3.88% on Wednesday at the close. .

But several markers still testified to a market on alert, like the VIX index, which measures market volatility and which rose by more than 3%.

“There is still anxiety about possible contagion within the banking sector, at the level of regional banks here or internationally with Credit Suisse,” noted Art Hogan, “and that is not going to disappear in a day.”

Considered the next weak link in regional or medium-sized establishments, the Californian bank First Republic was again targeted and its share price fell by 29.75%.

The title of the sign of San Francisco has lost more than 80% of its stock market value in eight days.

The bad wind was also blowing on other banks, the Californian PacWest (-19.44%) or Western Alliance (-8.90%), whose headquarters are in Phoenix (Arizona).

The major US banks were also down, but much more moderate, like JPMorgan Chase (-0.62%). Bank of America even managed to rise in the green (+0.21%).

As in previous sessions, investors showed little interest in today’s macro indicators.

New weekly jobless claims fell again, to 192,000, significantly less than last week (212,000) and than what economists expected (205,000).

Moreover, housing starts and building permits also came out well above expectations in February. “It’s a good thing”, according to Art Hogan, for whom “the stability of real estate is a positive element”.

Operators are again counting overwhelmingly on a quarter-point increase in the key rate of the American central bank (Fed) next week.

They nevertheless remain convinced that the Fed will proceed with several rate cuts between now and the end of the year.

On the side, Snap (+8.08%), parent company of the social network Snapchat, had the wind at its back when the American government officially recommended the sale of TikTok by its Chinese shareholder ByteDance, failing which the video platform faces an outright ban in the United States.

The news also benefited Meta (+0.09%), already supported by the announcement on Tuesday of a new wave of 10,000 job cuts, which will bring the share of staff erased from the group’s organization chart to 24%. from Menlo Park, California.

To a lesser extent, the creative platform and social network Pinterest (+2.20%) and Alphabet (+1.44%), parent company of YouTube, were also wanted.

The Adobe document creation and management software specialist was also sought after (+2.98%), after the publication of quarterly results that exceeded expectations. The group also raised its forecast for the whole of the 2023 financial year (closed in early December).

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