Wall Street reported sharp increases in the last day of the month, after General Motors and Facebook posted strong corporate reports and improved the moods. The major indices, however, ended with serious monthly decline.
The blue Dow Jones Industrial Average index rose by 242 points, driven by Visa and Goldman Sachs, thus accumulating an increase of 650 points for last two days. The main index S&P 500 recorded an increase of 1.1%, supported by the consumer and energy sectors. The technological index Nasdaq Composite expanded by 2% and shortly left the correction territory.
However, the major indexes ended the month with serious declines. The monthly decline of the S&P 500 is 6.9%, which is its worse performance since September 2011 when it collapsed by 7.2%. Dow Jones declined by 5.1%, which was the biggest drop since January 2016, when it wiped out 5.5%. The technology index Nasdaq Composite finished the month with a drop of 9.2%, which is the biggest loss of the index for 10 years – since November 2008, when the collapse was 10.8%.
Corporate reports fluctuate between very good and pretty good. There is some optimism that there may be a breakthrough in trade.
However according to the analysts, the fall this month has come from nowhere. It’s usually a sign of correction, not a bear market, as the bear market is usually slower.
The shares of General Motors jumped by 9.1% after the company reported better-than-expected finance results. The company sold less cars in the third quarter, but at higher prices, which supported its profit.
The shares of Facebook rose by 3.8% after the social network also surpassed analysts forecasts in its corporate report. The Chief Executive Officer Mark Zuckerberg said during a conference call that Facebook plans to invest significantly in its business next year, and to create products such as Facebook Watch and Instagram TV.
Facebook’s rise has led to a rise in stock prices, including Amazon, Apple, Netflix and Alphabet.
On the bonds markets, the yield on government securities rose after a new report, which showed that companies continue to hire employees at a faster pace in October, suggesting that the US economic strength remains. The returns on 10-year government bonds rose to 3.147% and 30-year government securities decreased to around 3.38%.
On the foreign exchange markets, the US dollar rose to a 16-month high against a basket of currencies, marking the seventh consecutive positive month. The US dollar recorded an increase of 0.13% to 97.12 points, which is its highest level since June 2017.