[New York Stock Market] Rebound Amid Japan's Tightening Concerns... Dow Up 0.28% on Bargain Buying

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market ended with a slight gain on the 20th (local time), breaking a four-day losing streak. Despite heightened concerns over tightening due to policy changes by the Bank of Japan (BOJ), the market rebounded as bargain buying was confirmed following the previously excessive sell-off.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 32,849.74, up 92.20 points (0.28%) from the previous session. The large-cap focused S&P 500 index rose 3.96 points (0.10%) to 3,821.62, and the tech-heavy Nasdaq index ended the day at 10,547.11, up 1.08 points (0.01%).

By sector, energy, communication, financials, and materials stocks rose, while real estate and consumer goods declined.

Among major stocks, Tesla closed down 8.05% compared to the previous session. Food manufacturer General Mills fell 4.58% despite beating market expectations. Gilead Sciences dropped about 2% following the announcement of its acquisition of Tmunity Therapeutics. Wells Fargo declined more than 2% after news emerged that it would pay $3.7 billion in fines and compensation over illegal fee charges. On the other hand, Newmont rose 4.43% as gold prices increased.

Investors closely watched the impact of the Bank of Japan’s policy changes. The BOJ, which had maintained large-scale monetary easing and ultra-low interest rates to stimulate the economy, shifted its monetary policy stance, further intensifying tightening concerns worldwide. Although the BOJ drew a line by stating that the recent move to widen the allowable range for the 10-year bond yield target to ±0.5% is not an interest rate hike, the market interprets it as a signal of transition from the ultra-low interest rate policy.

Henry Allen, a strategist at Deutsche Bank, warned, "The BOJ’s shift to a tightening policy means the removal of the last global anchor that helped keep interest rates low, so we should not underestimate the impact this will have."

Following the BOJ’s actions, U.S. long-term Treasury yields rose in the New York bond market. The 10-year Treasury yield climbed to 3.683%, briefly surpassing 3.7% during the session.

The dollar weakened. The dollar index, which measures the value of the dollar against six major currencies, fell nearly 0.7% to around 104 compared to the previous session.

Housing-related indicators released on the day were weak. November housing starts decreased 0.5% month-on-month to 1.427 million units, marking the third consecutive monthly decline. Building permits for new housing in November also dropped 11.2% month-on-month to 1.342 million units, a 22.4% decrease compared to a year earlier.

Nike and FedEx are scheduled to release earnings after the market close. With growing concerns about an economic downturn, these companies’ results are expected to attract more attention.

The personal consumption expenditures (PCE) index for November, a preferred inflation gauge of the Fed, is set to be announced this Friday. Edward Lewis, an analyst at investment firm Atlantic Equity, said, "Inflation may have peaked, but input costs remain high," forecasting that 2023 will be a more challenging environment for global consumers.

Oil prices rose amid the weaker dollar. On the New York Mercantile Exchange, the price of West Texas Intermediate (WTI) crude oil for January delivery closed at $76.09 per barrel, up 90 cents (1.20%) from the previous day.

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