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Fifth consecutive session of growth for Wall Street indexes

The focus of investors was the statement by Federal Reserve Governor Jerome Powell, who voiced concern over the growing US debt.

Wall Street indexes

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The main indexes of the New York Stock Exchange ended today’s session with rises against the disappointing sales results of the American department store chain Macy’s for the past two months of 2018. The session was the fifth consecutive positive for the stock markets.

The blue-chip index Dow Jones Industrial Average climbed by 111 points, or 0.47%, to a level of 23,990.32 points. The broader benchmark S&P 500 rose by 0.40% to 2,595.18 points. The technology index Nasdaq Composite rose 0.41% to 6,985.29 points.

Dow Jones index

The focus of investors was the statement by Federal Reserve Governor Jerome Powell, who voiced concern over the rising US debt.

“I’m very worried about that”, said Jerome Powell. “From the Fed’s point of view, we really look at the length of the business cycle, that’s our reference framework. The ongoing fiscal instability of the US federal government is not really something that is reflected in the medium term and which is relevant to our decisions”, added he.

On the bond markets, the yields on 10-year US Treasuries rose to 2.73%, while 30-year bonds rose to 3.047%.

In the currency markets, the dollar index added 0.35% to its value, reaching a level of 95.55 points.

In the commodity markets, the price of the Brent oil rose by 0.30 USD to 61.74 USD per barrel, while futures on US light crude WTI rose by 0.23 USD to 52.59 USD per barrel.

The price of gold fell by 4.60 USD to 1,287.40 USD per ounce.

Corporate stocks performance

The stocks of American Airlines shares fell by more than 4% after the company downgraded its fourth-quarter earnings forecast.

The US banks J.P. Morgan Chase, Bank of America, BlackRock and Morgan Stanley will publish their fourth-quarter finance reports.

The stocks of the American department store chain Macy’s wiped out 18% of their value after the company said sales from November and December rose only by 1.1%. For this reason, Macy’s reduced its earnings and revenue forecasts in the fiscal year 2018.

The stocks of technology companies were among the best performers. The shares of Netflix appreciated by 1.4%, receiving a big boost after the UBS analyst Eric Sheridan upgraded the stock to “buy” from “neutral” and raised his 12-month price target to 410 USD from 400 USD. Netflix’s stock rose by more than 24% in January to date.

The carmakers ended the session on red with General Motors wiping out 1.3%, while Ford Motor Company dropped by 0.5%.

Corporate reports

Macy’s reported sluggish sales for November and December and trimmed its guidance. The retailer now expects earnings per share to range between 3.95 USD to 4.00 USD, down from the previous range of 4.10 USD to 4.30 USD. The total annual sales are now expected to be flat versus a previously expected 0.3-0.7% uptick. The company also said its gross profit margin will shrink, rather than grow.

Target’s holiday sales increased 5.7% from last year, while Kohl’s reported a 1.2% increase in holiday sales compared to last year.

The business process services company SYNNEX Corporation announced financial results for the fiscal fourth quarter and fiscal year ended November 30, 2018. The cvompany reported a net revenue increase of 5.6% YoY in Q4 2018 to 5.622 billion USD. The operating income rose by 24% YoY to 198.3 million USD, while the net income increased to 113.2 billion USD.

For the financial year, SYNNEX Corporation reported 17.6% YoY increase in revenue to 20.054 billion USD.