[New York Stock Market] Rally on Strong Bank Earnings and UK Tax Cut Repeal... Nasdaq Up 3.43%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The U.S. New York stock market closed higher across the board on the 17th (local time) due to better-than-expected bank earnings and easing financial market concerns stemming from the UK. A bargain buying spree was also observed, centered on major tech stocks.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 31,185.82, up 550.99 points (1.86%) from the previous session. The large-cap focused S&P 500 index rose 94.88 points (2.65%) to 3,677.95, and the tech-heavy Nasdaq index gained 354.41 points (3.43%) to close at 16,758.0.

By sector, all sectors of the S&P 500 ended higher. Bank of America (BoA) and The Bank of New York Mellon reported earnings that exceeded expectations, with their shares rising 6.06% and 5.08%, respectively, from the previous close. Competitors such as JP Morgan (+4.20%), Wells Fargo (+1.83%), and Morgan Stanley (+2.44%) also saw their stock prices jump.

Leading tech stock Tesla surged 7.01%. Amazon rose 6.45%, and Nvidia increased 5.89%. Metaverse gaming platform Roblox announced that its user base grew 23% year-over-year in September, causing its stock to soar nearly 20% that day. CNBC reported that speculative rallies in tech stocks were also notable, with Zoom Video up more than 6% and Chinese internet stocks rising collectively.

Investors closely watched the earnings season in full swing, focusing on major companies' results and changes in future guidance. Particularly, the strong earnings from BoA and The Bank of New York Mellon supported the rally. BoA CEO Brian Moynihan stated during the earnings conference call that despite inflation and interest rate hikes, U.S. consumers' purchasing power remains robust.

This week, Netflix, Tesla, IBM, Johnson & Johnson, United Airlines, and AT&T are scheduled to report earnings. Investors are expected to seek hints on the impact of inflation and the Federal Reserve's (Fed) interest rate hikes on the economy through each company's earnings guidance.

Jeremy Siegel, a professor at the Wharton School of the University of Pennsylvania, appeared on CNBC that day and warned that the Fed's excessive tightening could push the U.S. economy into a deeper recession than necessary. He suggested that instead of raising rates by 0.75 percentage points at the next meeting, the Fed should consider bringing forward the planned pause in rate hikes next year. Professor Siegel added that although the stock market is currently undervalued, this does not mean a rebound is imminent. On the same day, investment bank Oppenheimer lowered its year-end S&P 500 target from 4,800 to 4,000.

The economic indicators released that day were weak. The October Empire State Manufacturing Index, which reflects manufacturing conditions in New York State, showed -9.1, down 7.6 points from the previous month. This marks the third consecutive month of contraction, indicated by negative values.

The bond and foreign exchange markets showed some stability, following the UK government's withdrawal of most of the tax cuts announced last month. In the New York bond market, the yield on the U.S. 2-year Treasury note, sensitive to monetary policy, fell slightly to around 4.45%. The 10-year yield dropped intraday to about 3.91% before recovering to the 4% range.

The dollar index, which measures the value of the U.S. dollar against six major currencies, fell more than 1%, trading around the 112 level.

Currently, investors are paying attention to whether the Chinese authorities will announce any economic stimulus measures as the Chinese Communist Party Congress has begun. However, concerns are growing that the delay in the release of economic indicators, originally scheduled during the congress period confirming President Xi Jinping's third term, may indicate that the actual data is not favorable.

Reflecting these concerns, international oil prices fell slightly. On the New York Mercantile Exchange, the November West Texas Intermediate (WTI) crude oil price closed at $85.46 per barrel, down 15 cents (0.18%) from the previous session.

This content was produced with the assistance of AI translation services.