The US stock exchanges rose slightly on the first trading day of the new year, after the good performance of banks, technology and energy companies offset the fears of a possible slowdown in the global economy.
The blue-chip index Dow Jones Industrial Average finished with an increase of 18 points, after dropping nearly 400 points earlier in the session. The broad index S&P 500 reported an increase of 0.1%. The technology index Nasdaq Composite recorded the highest growth of 0.46%.
At their lowest trading levels, the main indexes were more than 1% down. The shares on Facebook and Amazon rose by 3.5% and 2.5%, respectively, helping the Nasdaq to overcome its decline.
The banking sector also recovered from its earlier negative performance. The stocks of Goldman Sachs, Bank of America and J.P. Morgan Chase rose by more than 1%.
The energy companies also contributed pushing Wall Street up. The energy sub-index in the S&P 500 rose by 2.1%, driven by Cabot Oil and Schlumberger, and by the rise in oil prices.
Despite stable growths on Monday, the S&P 500 and Dow Jones Industrial Average recorded declines of respectively 6.2% and 5.6% in 2018. Both indicators reported their biggest annual losses in 2008 when they collapsed 38.5% and 33.8% respectively. The technology index Nasdaq Composite lost 3.9% of its value in 2018 – its worst year of a decade when it collapsed by 40%.
In bond markets, government bond prices rose after weaker-than-expected data from China, Europe, and the United States, which fueled fears of economic slowdown in the coming months.
The yields on 10-year government bonds reached their lowest level since January 2017, down to 2.677%. The yields on 30-year government bonds reached 3.02%.
In foreign exchange markets, the dollar appreciated against the Euro and British pounds, starting the new year. The dollar index, which measures the value of the greenback against a basket of currencies, recorded an increase of 0.69% to 96.395 points.
Crude oil prices also went up after their weak performance during the Asian trading session. The raw material was backed by the signals from Saudi Arabia for a reduction on oil mining, which offset record US and Russian yields and weak economic data.
The oil futures jumped by 5% earlier in the session but failed to keep their growth in the afternoon. Futures on US crude oil WTI ended Wednesday’s session on a two-week high, rising by 1.13 USD, or 2.5%, to 46.54 USD per barrel. The Brent crude oil contracts rose by 1.13 USD, or 2.1%, to 54.93 USD per barrel after they were even traded for even 52.51 USD per barrel.
The price of gold, however, rose sharply, reaching its highest level in six months of 1,284.10 USD per ounce.
The US companies have returned over 500 billion USD in the country in 2018
The US companies have returned to the country in 2018 over half a trillion dollars, which they held abroad to take advantage of tax changes. However, the data show that the pace has slowed down, thus removing a key source of support for Wall Street.
The dollar repatriation in the July-September period has fallen to 93 billion USD, which is about half of the value for the second quarter and less than a third from the first quarter.
The high value of the money returned followed the new regulations that allowed the US government to tax the income earned abroad by US companies, no matter where the money is held. The previous legislation rules allowed companies to “defer” US taxes on revenues accrued outside of the country unless they returned the money.
The legislation change stimulated the companies to return 3 trillion USD, which their own in accounts abroad.