[New York Stock Market] Rise on Strong Corporate Earnings and Expectations of a Slowdown... Nasdaq Up 1.36%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed higher on the 22nd (local time) as investors focused on strong corporate earnings and the possibility of a reduced pace of future interest rate hikes.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,098.10, up 397.82 points (1.18%) from the previous session. The S&P 500, centered on large-cap stocks, rose 53.64 points (1.36%) to 4,003.58, and the Nasdaq, focused on tech stocks, gained 149.90 points (1.36%) to close at 11,174.41.

By sector, energy stocks showed strength as international oil prices rose for the first time in five trading days. Occidental Petroleum closed up 4.57% from the previous session. ExxonMobil rose 2.91%, and Chevron increased 2.61%. Tech stocks such as Nvidia (+4.71%), Tesla (+1.22%), and Apple (+1.47%) also showed upward momentum. In contrast, real estate stocks underperformed.

The impact of earnings was also evident. Best Buy surged nearly 13% on better-than-expected earnings and an upward revision of its annual guidance. Abercrombie & Fitch also soared 21.42% on strong earnings, citing increased clothing demand due to consumers returning to workplaces. This earnings effect was notably confirmed among retail distribution stocks such as American Eagle (+18.15%), Burlington (+20.50%), and Urban Outfitters (+8.89%). Conversely, Zoom Video declined nearly 4% after releasing earnings guidance below expectations. Dollar Tree also fell 7.79%.

Investors monitored corporate earnings, China’s COVID-19 situation, and remarks from Federal Reserve officials ahead of this week’s Thanksgiving holiday. The market will be closed on the 24th for Thanksgiving and will close early at 1 p.m. on the 25th, making it a relatively low-volume week. The previous day’s NYSE stock trading volume was the lowest since August 29.

While corporate earnings showed strength, China’s COVID-19 spread worsened. New infections in China remained in the 20,000 range for the sixth consecutive day as of the previous day. Prevention policies were further tightened in regions including the capital Beijing. Shima Sha, Chief Global Strategist at Principal Asset Management, warned, "Since China’s economic reopening will be key to investment outlooks, investors need to monitor the situation carefully."

Currently, investors are also awaiting further clues on the Federal Reserve’s monetary policy. The minutes of the November Federal Open Market Committee (FOMC) meeting will be released on the 23rd. While the pace of Fed rate hikes is expected to slow, the final rate may be higher than anticipated. The previous day, Loretta Mester, President of the Cleveland Federal Reserve Bank, emphasized reducing the pace of future rate hikes. On the same day, speeches by Esther George, President of the Kansas City Fed, and James Bullard, President of the St. Louis Fed, were scheduled.

Goldman Sachs stated in a report, "The bear market is not over, and the rate hike cycle is not finished. Focus on the FOMC minutes to be released tomorrow."

On the same day, U.S. Treasury yields fell amid concerns over economic slowdown as investors watched China’s COVID-19 situation. The 10-year U.S. Treasury yield dropped to around 3.76%. The 2-year yield, sensitive to monetary policy, briefly fell below 4.5% but then recovered. The inversion of long-term yields below short-term yields, typically seen as a recession warning sign, continued.

The dollar weakened on the same day. The Dollar Index, which measures the dollar’s value against six major currencies, fell 0.6% to around 107.1.

International oil prices rose for the first time in five trading days after Saudi Arabia denied production increase rumors. On the New York Mercantile Exchange, January WTI crude oil prices closed at $80.95 per barrel, up 91 cents (1.14%) from the previous session.

The OPEC+ oil-producing countries’ meeting is scheduled for December 4. This is just one day before the European Union’s ban on Russian oil imports and the Group of Seven (G7) implementation of a price cap on Russian oil. The Wall Street Journal (WSJ) reported that the U.S. and its allies are discussing setting the price cap near $60 and may reach an agreement as early as the 23rd.

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