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NEW YORK (dpa-AFX) – Before the weekend, the US stock market, under the impression of a major rise in interest rates looming, once again significantly increased its already heavy losses from the previous day. The day before, US Federal Reserve Chairman Jerome Powell had spoken about a major interest rate hike at the next Fed meeting in early May, thereby spoiling the good mood in the market.
The leading index Dow Jones Industrial (Dow Jones 30 Industrial) fell on Friday by 2.82 percent to 33,811.40 points, which means that it posted a minus of around 1.9 percent on a weekly basis. The market-wide S&P 500 lost 2.77 percent to 4271.78 points at the end of the week. The technology-heavy NASDAQ 100 fell by 2.65 percent to 13,356.87 points, whose weekly balance sheet is also deep red with a loss of around 3.9 percent. The losses over the weekend have thrown the indices back to mid-March price levels.
“As interest rates continue to rise, the pressure on the stock market also increases, because those who can achieve attractive returns without risk are avoiding investments that were once without alternatives in this uncertain environment,” said analyst Konstantin Oldenburger from broker CMC Markets. For ten-year government bonds you get almost three percent again, which not only means the level of 2018, but also threatens to break a four-decade-long downward trend in interest rates.
On Wednesday, the yield on paper with a ten-year term reached 2.98 percent, its highest level since the end of 2018. After Wall Street closed on Friday, it was 2.90 percent, the futures contract for ten-year Treasuries (T-Note Future) rose 0.21 percent to 119.00 points.
Verizon’s shares lost 5.6 percent after the telecom group had formulated more cautious expectations than before in the face of tough competition for the current year. In the first quarter, Verizon also had to cope with the loss of 292,000 mobile contract customers. Competitor AT&T, on the other hand, had reported a significant plus of 691,000 new contracts after deduction of terminations. Only the titles of the construction machinery manufacturer Caterpillar were weaker than Verizon in the Dow on Friday with minus seven percent.
According to quarterly figures, American Express shares fell by 2.8 percent. In the face of high spending, the credit card company’s profit fell, although it exceeded market expectations.
Worries about the economic consequences of the Russian war in Ukraine had an impact on the advertising business of the photo app Snapchat. The past quarter has presented the company with greater challenges than expected, admits the head of the parent company Snap, Evan Spiegel. Fluctuating more in the course of trading, their shares were 1.2 percent higher at the close of the market.
The oil field service provider Schlumberger convinced investors with its interim report and also surprised them with a dividend increase of 40 percent. The shares gained 2.5 percent.
The euro fell on Friday. In New York trading, 1.0797 US dollars were last paid for it. The European Central Bank (ECB) had set the reference rate at 1.0817 (Thursday: 1.0887) dollars, the dollar cost 0.9245 (0.9185) euros./ajx/he
— By Achim Jngling, dpa-AFX —