(New York) The New York Stock Exchange fell again on Monday, on the eve of a two-day monetary meeting of the American Federal Reserve (Fed) and after heavy losses the previous week.
Posted at 9:44 a.m.
Updated at 10:24 a.m.
At 10 a.m., the Dow Jones index was down 1.78%, the NASDAQ was down 2.52% and the S&P 500 was down 2.18%.
On Friday, the Dow Jones was down 1.30%, its sixth straight decline session, while the NASDAQ, heavily influenced by technology stocks, lost 2.72% and the S&P 500 extended index, 1.90% .
Over the week, the Dow Jones dropped 4.5% and the NASDAQ fell 5.6%.
The prices of risky assets like cryptocurrencies continued to slide in correlation with the decline in growth stocks, especially technology.
Bitcoin lost 4.5% to $33,744, a level not seen since July.
The dollar climbed 0.43% against the euro to 1.1295 dollars for one euro, before a meeting of the Monetary Committee of the American Central Bank began on Tuesday. The prospect of a rise in overnight rates from the Fed in the spring boosted the greenback.
“The Fed’s meeting will be watched closely as investors watch for clues as to how much it will raise rates and from when,” said Art Hogan, market strategist for National Securities.
In their last average rate forecasts, the members of the Monetary Committee had suggested that we were heading for three rate hikes of 25 basis points in 2022.
But since then, the markets have been convinced that this rate of monetary tightening will be accelerated.
According to Art Hogan, “economists are expecting a rise of a quarter of a percentage point from March”.
Briefing.com’s Patrick O’Hare pointed out that “selling pressures are not letting up” as the geopolitical situation with Ukraine darkens investors’ moods.
“Tension between the West and Russia over Ukraine has escalated, as evidenced by the State Department’s order to leave the country to the families of US embassy workers in Kyiv” , noted the analyst.
The week was very busy in corporate results with 3m, Johnson & Johnson and Microsoft on the menu on Tuesday, Boeing, Intel and Tesla on Wednesday, then Apple, the largest capitalization on Wall Street, on Thursday.
In addition, investors were also awaiting the first estimate of US growth (GDP) for the fourth quarter released on Thursday.
Bond yields on 10-year Treasury bills eased a little to 1.72% from 1.75% at the previous close. They had climbed above 1.80% last week.
The American oil services group Halliburton lost 2.76% to 26.77 dollars despite quarterly and annual revenues above expectations, driven by rising oil prices.
Apart from the consumer products sector which was stable, all the S&P sectors were clearly in the red such as materials (-1.79%), energy (-1.66%) while oil prices were in retreat.
The decline was widespread, from banks like Morgan Stanley (-3.16%) or Goldman Sachs (-4%) to the big names in tech, from Google (-2.69%) to Facebook (Meta, -3.65 %).
Among the values of the day, the specialist in high-end exercise bikes Peloton, which had suffered a descent into hell last week, kept its head above water (+4.34% to 28.25 dollars).
The company, which has had great success with the pandemic but is facing a drop in demand, has suspended production, according to information published Thursday by the CNBC channel. The stock has fallen almost 25% since January.
On Monday, activist investor Blackwells Capital sent a letter to Peloton’s board demanding the immediate departure of the group’s boss and the sale of the company.