Wall Street closes sharply higher despite disappointing results from Amazon

(New York) The New York Stock Exchange ended sharply higher on Friday, as hopes of a US Federal Reserve (Fed) hike outweighed the technology sector’s poor performance.

Updated yesterday at 17.29.

The Dow Jones rose 2.59%, the NASDAQ rose 2.87% and the broader S&P 500 rose 2.46%.

The session, like the week, was “a standoff” with “on the one hand the disappointing results of the giant capitalizations of technology and on the other hand the signs of a softening economy and the growing hopes of a Fed deceleration,” explained Angelo Kourkafas from Edward Jones.

Alphabet on Tuesday, then Meta on Wednesday and finally Amazon on Thursday all surprised Wall Street unfavorably, “but the market didn’t fall much, and even ended up recovering,” said Karl Haeling of LBBW.

“Most of the damage was limited to the technology sector and did not spread to the rest of the market,” he continued.

The analyst also noted that the financial system had seen net inflows of money into equity mutual funds this week, indicating renewed investor appetite for this market.

Another strong marker, according to Karl Haeling, the S&P 500 has crossed, increasingly, an important technical threshold (the average over the last 50 sessions) and has not fallen.

Momentum was such on Friday that even the technology sector ended in the green, Amazon being the only bad student (-6.80% to $103.41).

The US retail giant posted a 9% drop in net profit in the third quarter and expects anemic growth by its standards of between 2% and 8% year-on-year in the crucial fourth quarter of the fiscal year, because it includes the end of the year . celebrations.

Apple (+7.56% to $155.74) has played down the rather gloomy picture painted by the other four tech giants this week. It had higher-than-expected revenue and profit on Thursday, even though iPhone sales missed the mark.

Unlike its competitors, the apple group also maintained its margins and showed cautious optimism for the current quarter.

For Angelo Kourkafas, the macroeconomic indicators of the week confirmed that the economy was in a cooling phase, especially those relating to October, the most recent period, such as the PMI indices that revealed that activity fell in the United States. .

Therefore, it seems “reasonable” to believe that “the end of the monetary tightening cycle is in sight”, according to the analyst, which pleases traders.

Although they rebounded on Friday, bond yields fell back this week, indicating a change in investor expectations after 12 consecutive weeks of gains, a sequence not seen in nearly 40 years.

On the site, no trace of Twitter, whose listing was suspended on Friday after the formalization of the takeover by Elon Musk. The New York Stock Exchange said it expects to delist after all shares are bought back at $54.20 per share, slightly better than the last price ($53.70).

Elon Musk-led Tesla rose 1.52% to $228.52.

ExxonMobil (+2.93% to $110.70), which had already reached its all-time high in the previous day’s session, remained in the lead after posting a quarterly net profit well above analysts’ expectations, although its revenue came in below forecasts .

The group took advantage of high oil and gas prices and produced its largest amount of refined products in 14 years.

Its rival Chevron (+1.17% to $179.98) fared even better, smashing market estimates, with net profit nearly doubling over a year. In particular, the group in San Ramon (California) multiplied by six its profits in international refining.

Buoyed by the general enthusiasm, Intel rose (+10.66% to $29.07), despite the drop in revenue in the third quarter and the lowering of the year’s forecasts.

Colgate-Palmolive advanced (+1.93% to $74.64) after announcing results broadly in line with expectations, but marked by a compression of its margins and a rise in its costs. The group of hygiene and maintenance products has also slightly lowered its forecasts for the whole year.

In Toronto

The Toronto Stock Exchange closed higher for a sixth straight session on Friday, despite losses in the Base Metals, Telecoms and Battery Metals sectors, while major U.S. indexes also advanced.

The Toronto Stock Exchange’s S&P/TSX Composite Index rose 119.08 points to end the day at 19,471.19.

U.S. markets are reacting to a combination of quarterly corporate earnings reports and weaker-than-expected economic news, particularly on the housing side, said Kevin Headland, chief investment strategist at Manulife Investment Management.

“Some of the inflation data that came in was really in line with expectations,” he said. So I think the market is recovering. »

Markets in Canada are more mixed, Headland added, with commodities and materials dragging down the index. He added that the GDP data released on Friday did not bring any major surprises, especially after the Bank of Canada’s revised estimates released earlier this week.

“Typically, the Canadian stock market doesn’t move as much on national economic data as the US market does,” he explained.

In foreign exchange, the Canadian dollar traded at an average price of 73.45 cents US, down from its average price of 73.82 cents US on Thursday.

Overall, October was a good month, Headland said. “The way September ended set the stage for a decent recovery in October.”

Markets could become less volatile in the coming weeks and months as Canada and the United States near the end of central bank tightening cycles, Headland predicted.

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