Wall Street again plumbed by technology – 26/10/2018 23:02:06

(Reuters) – The New York Stock Exchange ended sharply lower on Friday, wiping out its rebound the day before the disappointing results of Alphabet and especially Amazon, which overshadowed the confirmation of sustained economic growth. in the USA.

The Dow Jones index lost 296.24 points, or 1.19%, to 24,688.31.

The broader S & P-500 dropped 46.88 points, or 1.73%, to 2,658.69, after falling as much as 2.86% in the morning.

The Nasdaq Composite, which dropped 3.57% at its lowest, finished on a decline fell 151.12 points, or 2.07%, to 7,167.21.

At the low of the day, the S & P-500 was down more than 10.65% from its high in August, joining the Nasdaq correction zone. At closing, however, the decline was reduced to 9.6%, against -11.88% for the Nasdaq since its record of August 30.

Over the week as a whole, the Dow fell 2.97%, the S & P -500 3.94% and Nasdaq 3.78%.

For some investors, this decline is synonymous with opportunities.

"The seller's movement remains very tight," said Jim Paulsen, head of investment strategy for The Leuthold Group. "I think a lot of people are waiting to talk about the right time to buy, and they see it as more of an opportunity to buy than a risk."

INDICATORS OF THE DAY

The day had started well with the announcement of 3.5% annualized growth in the US in the third quarter, a figure higher than expected even if it reflects a slowdown.

The other indicator of the day in the United States, the index of household confidence of the University of Michigan, was down to 98.6 according to the final results, against 100.1 in September and 99 in first estimate.

But the good news of growth has been eclipsed by the news results, which has revived questions about the impact of trade tensions, rising interest rates and rising wages.

VALUES

Amazon has been heavily penalized after a quarterly turnover lower estimates and predictions for the holiday season less sustained than expected: the title of the giant online business has dropped 7.82%.

The group led by Jeff Bezos has lost its title of second world market capitalization for the benefit of Microsoft.

Alphabet, the parent company of Google, has simultaneously yielded 1.8% after missing the consensus of turnover on July-September.

The decline of these two heavyweights of high technologies has favored that of other big names in the sector: Facebook has dropped 3.7%, Apple 1.59% and Netflix 4.17%.

"Expectations on the results of Google and Amazon were really high, and investors may be counting on their results to pull the market out of the correction," said Paul Brigandi, Direxion's director of trading in New York.

"The correction started because of interest rates and customs duties, so people were waiting for the earnings season to break with the downtrend."

Eliminating the general bout of weakness, Intel gained 3.11%, by far the biggest rise in the Dow, after quarterly results exceeded expectations, although its interim managing director, Bob Swan, stressed that the tensions trade with China could be a "headwind" next year.

THE SESSION IN EUROPE

European stock markets have also ended the day in the red, digging a little more losses in October, which looks like their worst month since 2015.

In Paris, the CAC 40 finished on a loss of 1.29% to 4,967.37 points. The British Footsie yielded 0.92% and the German Dax 0.94%.

The EuroStoxx 50 index fell by 0.93%, the FTSEurofirst 300 by 0.81% and the Stoxx 600 by 0.77%.

Over the week, the CAC dropped 2.31% and the Stoxx 600 2.46%. At three sessions at the end of the month, they are respectively at 9.56% and 8.05% their decline since October 1st, their worst monthly performance since August 2015.

The heaviest drop of the day was for Valeo, whose market value fell by 21.02% after a new warning on its 2018 forecasts, which it explains by the impact of the new WLTP certification standards and that of the slowdown. brutal Chinese auto market.

EXCHANGE

The fall of Wall Street has favored that of the dollar, which at the end of the session was down 0.32% against a basket of reference currencies, while at the beginning of the day it had reached its highest level in two months. reaction to GDP figures.

The euro took the opportunity to climb to 1.14 dollar after touching, at 1.1366, its lowest level since mid-August.

The decline in safe-haven stocks against the new bout of weakness in the equity markets was particularly beneficial for the yen and the Swiss franc.

RATE

Another consequence of the fall in Wall Street: US Treasury yields have fallen to their lowest level for three weeks, enjoying full of their safe haven status, the decline of Wall Street again outweighing the numbers US GDP.

The 10-year Treasuries' return was 3.079% at the end of the session after dropping to 3.057%, its lowest level since October 3rd.

In addition to the flight to quality in reaction to the decline of Wall Street, the fall in yields is fueled by speculation that the Federal Reserve will give up rates again in December in order to rebadure the markets.

OIL

Oil prices ended up higher, again supported by the imminence of US sanctions against Iran, but they remain down over the week.

The December contract on US light crude (West Texas Intermediate, WTI) gained 26 cents, or 0.39 percent, to $ 67.59 a barrel. Brent took 73 cents (+ 0.95%) to 77.62 dollars.

Over the week, the price of WTI fell by 2.14%, that of Brent by 2.63%. The latter has lost more than 10% since the peak of nearly four years registered three weeks ago to 86.74 dollars.

FOLLOW MONDAY:

Monday will be animated by, among other things, the presentation of the UK government's draft budget and the publication of HSBC's quarterly results.

(Marc Angrand, with Caroline Valetkevitch in New York and Amy Caren Daniel in Bangalore)