Markets fear new elections in Italy (Photo Bryan R. Smith. AFP)
The New York stock Exchange was shaken Tuesday by the effects of the political crisis in italy, which has hit bank stocks on Wall Street pushing us interest rates.
Its index feature, the Dow Jones Industrial Average, fell 1.58 percent to 24.361,45 points, after falling more than 2% during the session.
The Nasdaq, to dominant technological, declined from 0.50% to 7.396,59 points.
The expanded index S&P 500 has lost 1,16% to 2.689,86 points.
This decrease was driven by the decline of the big u.s. banks, the sector representing the financial stocks in the S&P 500 tumbling of 3.37%. Morgan Stanley (NYSE:MS) and JPMorgan Chase (NYSE:JPM) dropped respectively to 5.75% and 4.27%.
“The u.s. market-not fear, not a contagion of the crisis to Italy, but they fear the consequences of the rush for assets considered to be safe,” said Art Hogan of Wunderlich Securities.
The third largest economy in the euro zone is plunged in uncertainty, in expectation of the formation of the government of the economist Carlo Cottarelli, that the populist parties have announced that it wants to reject in order to make the faster the word to the Italians.
Ebranlés, investors have massively diverted from the country’s debt, and that of its neighbours, spaniards, Portuguese and greeks, and fled to safehaven securities such as debts German and american.
Result-a sign of increased interest, the interest rate on u.s. Treasury 10-year has dropped by more than 5% Tuesday. He moved to 20: 15 GMT to 2,782%.
“When the downturn in the +10 years+ has increased during the session, the financial values have followed”, the latter seeing their margins shrink when interest rates fall, noticed Mr. Hogan.
Conversely, “sectors that tend to benefit from lower rates, such as real estate (+0.25%) or public service company (+0,04%) have limited their losses,” stressed the specialist.
In addition to Matt Miskin, a strategist for John Hancock Financial Services, “if fears of default and capture the market, banks will be in the front line”.
– Closure of the stores of Starbucks (NASDAQ:SBUX) –
The Spanish government of Mariano Rajoy is on his side in the face of a motion of censure tabled by the socialists which will be debated on Thursday and Friday. “This doesn’t seem like a big threat but this does not increase stability,” said Karl Haeling of LBBW.
These european turmoil fuelling a little more, according to him, the feverishness of the markets in the face of the stack of situations that could degenerate at any time, whether it’s the commercial relations of the United States with its main partners, tribulations diplomatic with North Korea, or the growing problems created by the rise of the dollar in the emerging countries.
Among the other values of the day, the coffee chain Starbucks has yielded 1.19 percent. It was closed Tuesday, the doors of some 8,000 institutions in the u.s. to educate its employees on racism.
Disney has let go of 2.46%. Its subsidiary, the american channel ABC announced on Tuesday that the brutal stop of the very popular series “Roseanne” after a racist tweet from the star of the program, Roseanne Barr, the support of Donald Trump and controversial figure.
The entries for the first weekend of the new film from the Star Wars saga, “Solo: A Star Wars Story”, are also shown to be disappointing.
The pharmaceutical company Allergan, which announced the recall of birth control pills in the United States because of a problem with placebo tablets, has lost 1,93%.
The chip maker Qualcomm (NASDAQ:QCOM) has dropped 1.87 percent, while, according to the Wall Street Journal, the chinese authorities are about to give their green light to the takeover of the Dutch NXP.