Wall Street continues to rebound while waiting for the Fed
The New York Stock Exchange ended up sharply on Friday, driven by good results from cyclical companies such as Caterpillar (+3.3%) and Honeywell (+4.3%) and statistics deemed reassuring on inflation which revived investors’ risk appetite ahead of the Fed meeting.
The sharp drop in Amazon.com (-6.8%), following its disappointing forecast for the fourth quarter, was offset by a sharp rise in Apple (+7.6%) and cyclical stocks. The stock market showed strong resilience as buyers were undeterred by the rebound in bond yields, with the 10-year yield ending above 4.00%, up 7 bps .
Ten of the eleven sectors closed higher, led by information technology (+4.5%). The sector was boosted by Apple, but Intel (+10.7%) posted bigger gains thanks to its quarterly results and the announcement of a $10 billion cost cut. In contrast, the Consumer Discretionary sector (-0.3%) was the worst performer due to the fall of Amazon. However, the sector recovered well after a loss of 3.8%.
Moreover, the market showed resilience, as it continued to rebound despite economic data that should not prompt the Fed to reconsider its monetary tightening. Personal incomes and spending were solid, employment costs for the third quarter slowed slightly but remained elevated and consumer sentiment was revised slightly higher. Only pending home sales fell.
S&P 500 daily price chart – key levels