The rally in technology shares boosted Wall Street and softened the end of a tough week

A man uses his cell phone outside the New York Stock Exchange.  (AP Photo/Mary Altaffer)
A man uses his cell phone outside the New York Stock Exchange. (AP Photo/Mary Altaffer)

The rally in tech stocks on Friday applied some balm to Wall Street’s tough week, dominated by concerns about the weakening economy.

The S&P 500 It rose 1.9% on Friday but still ended with its first weekly loss in the last three. The nasdaq added 2.7% and the Dow rose 1 percent

Google’s parent company rose after saying it was cutting spending by laying off workers. It is the latest big tech company to admit to having expanded too fast in recent years. Netflix rose after announcing an increase in the number of subscribers. Markets mostly fell this week on fears the economy may not avoid a painful recession.

Not a long time ago, bad news about the economy used to be wickedly good for Wall Street. This was because investors took them as a sign that the Federal Reserve might ease its rate hikes. But bad news about the economy is increasingly becoming bad news for Wall Street, too, which worries more about the prospects of a severe recession.

To further complicate matters, several Federal Reserve officials insisted throughout the week that they are likely to continue to raise rates and hold them there for a while to ensure that the country’s high inflation is actually squashed. Although inflation has started to slow, it remains under upward pressure from a still strong US labor market and other factors.

Many Wall Street investors came into this week already forecasting a recession modest or brief, but they also hoped that rate cuts by the Federal Reserve later this year could signal a rebound for markets. This week’s sour economic data and comments from central bankers threaten such forecasts.

The gains from the values ​​oriented to the technology drove a large part of the S&P 500’s rise on Friday. The parent company of Google said it was cutting costs by laying off 12,000 workers, and Netflix reported an increase in its number of subscribers.

alphabet It rose 4.8% after becoming the latest big tech company to admit it had expanded too fast in recent years amid the boom created by the pandemic. Netflix rose 7.9%.

The companies of cruise ships They also posted profits. Carnival rose 4.2%, Norwegian Cruise Lines 5.1% and Royal Caribbean 3.5%.

The stock market could be prone to even wilder swings on Friday than in the past, as $797 billion in stock option contracts expire. It is the largest amount for individual stock options since January 2022 and the fourth largest on record, according to Goldman Sachs.

The yields of the Treasury bond they rose on Friday, recapturing declines earlier in the week fueled by concerns about a weakening economy. The 10-year Treasury yield, which helps set rates on mortgages and other major loans, rose to 3.48% from 3.40% on Thursday.

The two-year yield, which tends to more closely track Fed expectations, rose to 4.20% from 4.13%.

International stock markets posted modest gains.

The Nikkei 225 rose 0.6% after Japan reported that its consumer inflation rate reached 4% in December, its highest level in 41 years. This high figure could increase pressure on the Bank of Japan to change its policy of keeping the official interest rate at an ultra-low level of minus 0.1%. But economists expect price pressures to ease in the coming months as inflation eases elsewhere.

(With information from AP)

Keep reading:

Fears of a possible US recession pushed shares on Wall Street lower
Annual inflation in the United States fell for the sixth consecutive month and stood at 6.5 percent
What are the 10 cheapest cities to buy a property in the United States

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button