The New York Stock Exchange ended lower on Tuesday, as the market was reassured by the stabilisation of the banking system, but lacked conviction and indicators capable of driving the trend.
The Dow Jones shed 0.12%, the Nasdaq index 0.45% and the broader S&P 500 index lost 0.16%.
The session had started with mixed fortunes, but the indexes all quickly moved into the red. “There seems to be no momentum to buy or sell outright,” commented Steve Sosnick of Interactive Brokers.
Investors still scared by the financial earthquake of recent weeks
“It’s a good thing that there is no more news” after a hectic couple of weeks on the banking front, “but in the absence of development” or any significant macroeconomic indicator , “there are not many important elements to build on,” the analyst continued.
In this context, Steve Sosnick explained, the market can be driven by technicals, but the indices are currently midway between two major thresholds (the average of the last 50 trading days and the average of the last 200 sessions), without finding support on either.
In the end, Wall Street was forced to move within tight margins. These narrow spreads also reflected the caution of investors, still scarred by the financial earthquake of recent weeks.
Wall Street struggling to find direction
“The problem with a financial crisis is that no one is going to come and tell you that it’s over,” Sosnick argued. Wall Street is struggling to find a direction “because there are still a lot of unknowns.”
Even the US regional banks, superstars of the stock market since the beginning of March, had a relatively quiet day, like First Citizens (+2.29%), which was in the spotlight on Monday after the announcement of its takeover of Silicon Valley Bank (SVB), or California’s First Republic (-2.32%), often seen as a possible weak link.
Sought after in recent weeks, technology stocks were again the subject of profit-taking, as on Monday, particularly Alphabet (-1.65%) and Meta (-1.06%).
Affirm drops 7.34% after Apple launches Pay Later
Subjected to very strong pressure with the banking crisis, bond yields continued to rise. The yield on 10-year US government bonds stood at 3.56%, compared with 3.52% at the close on Monday.
On the stock market, clothing group PVH soared (+20.02%) after publishing a net profit that was significantly higher than expected for the last quarter of 2022, thanks in particular to the good performance of the Calvin Klein brand.
Internet instalment specialist Affirm (-7.34%) took a battering from the arrival in this market of giant Apple, which launched its Apple Pay Later service on Tuesday.
Chinese retail giant Ali Baba up by over 14%
Pharmacy giant Walgreens rose (+2.67%) on better-than-expected quarterly sales, although its net profit came in below expectations due to higher costs.
The Lyft booking platform devalued (-7.60%) after it announced a new chief executive, David Risher, formerly of Amazon and Microsoft. He will succeed co-founder Logan Green, who will become chairman of the board.
After clearly benefiting from the woes of TikTok, threatened with a ban in the US, Snap (-5.79%), parent company of social network Snapchat, and Pinterest (-4.38%) suffered profit-taking.
Investors welcomed the prospect of New York-listed Chinese online retail giant Alibaba (+14.26%) splitting into six separate entities, five of which could be listed separately.