Traders on the floor of the New York Stock Exchange on February 12, 2018 (Photo: Drew Angerer. GETTY IMAGES NORTH AMERICA)
Wall Street pulled back on Tuesday at the closing, fearing that the optimism of the new president of the american central bank (Fed) during a hearing in Congress leads to higher rate increases than the three planned in 2018.
According to the final results at the close, the index featured Dow Jones Industrial Average has lost 1,16%, or 299,24 points, 25.410,03 points.
The Nasdaq, in high coloring technology, has fallen by 1.23%, or 91,11 points, 7.330,35 points.
The expanded index S&P 500 has dropped 1,27%, or 35,32 points, 2.744,28 points.
In front of a committee of the house of Representatives and on the occasion of his first public intervention, the new chairman of the Fed Jerome Powell painted a picture very optimistic of the U.s. economy, claiming that its own projections of inflation and growth had improved since December, thanks in particular to the tax reform adopted by the administration to Trump.
“Jerome Powell appears ready to raise rates more quickly than expected to contain inflation and has held a speech firmer than its predecessor” Janet Yellen, noted Peter Cardillo of First Standard Financial.
Mr. Powell seems to be “open to a fourth rate hike this year”, the Fed have for the moment indicated that it was anticipated that three in 2018, said Karl Haeling of LBBW.
Rate hikes increase the cost including the cost of borrowing for companies, where the decline on Wall Street.
– Mr. Powell to the Senate –
Sensitive to the prospects of rising inflation and growth in the long term, the interest rates on american debt are strongly tense after this intervention.
The rates on Treasury bills to 10 years amounted to 2,899% against 2,862% Monday evening, and one to 30 years 3,163% as against 3,153% the day before, also making pressure on the stock market.
The next hearing of Mr. Powell will take place on Thursday in the face of a Senate committee.
On the front, macro-economic news has been about them to be rather positive: the housing prices in the United States were up in December and consumer confidence has reached in February its highest level since 2000.
Small downside: the durable goods orders declined in January.
Among the values of the day, Boeing (NYSE:BA) has increased (+0.32 per cent to 364,64 dollars) after it announced on Tuesday the finalization of the contract for the construction of the presidential planes (Air Force One) of the new generation.
Sector groups health Walgreens (-2,07% 69,14 dollars) and AmerisourceBergen (NYSE:ABC) (-2,92% 97,64 dollars) have fallen after a failed attempt of redemption of the second by the first, reported in the american press.
The group of large retailers macy’s has increased (+3.46% to 28,40 dollars) after taking more than 10% during the trading session following the publication of profits in strong rise.
The cable operator, Comcast (NASDAQ:CMCSA) has dropped (-7,38% 36,66 dollars) after it unveiled an offer of $ 31 billion to acquire the british television channel Sky, a superior proposal to that of the group 21st Century Fox (-3,04% 37,63 dollars), the empire of magnate Rupert Murdoch.
Disney has also fallen sharply (-4,50% to 104,87 dollars), while the group wishes to acquire a part of the activities of the Fox.