Technology Backs Wall Street | Press

(New York) The New York Stock Exchange ended sharply higher on Friday after several weak sessions on technology and a more dovish tone on interest rates from some Fed members.

In late trade, the accelerating Dow Jones index rose 1.00% to 33,375.49 points, the tech-heavy NASDAQ gained 2.66% to 11,140.43 points, and the S&P 500 rose 1.89% to 3,972.61 points.

Netflix’s strong subscriber numbers last quarter and further job cuts in the tech sector, along with Google’s recent announcement that it will cut 12,000 jobs, boosted the NASDAQ.

“After several sessions of a generally weak market, investors feel most of the bad news has passed and stocks are oversold,” said Jack Ablin of Cresset Capital.

So Google’s parent company, Alphabet, became the latest group to announce layoffs on Friday, following Microsoft, Amazon, Meta, Salesforce and Twitter.

About 12,000 jobs worldwide, or 6% of Google’s workforce, will be cut.

Investors cheered the cost cuts, sending Alphabet shares up 5.72% to $99.28.

“Tech stalwarts have been hiring at an unsustainable rate, and the deteriorating macro environment is now forcing them out of business,” commented Dan Ives of Wedbush Securities.

The day before, after the market closed, the leader of online streaming, Netflix, announced a sharp increase in the number of its subscribers, which increased by 7.6 million in the last quarter alone, more than expected. Wall Street.

Netflix shares rose 8.46% to $342.50.

In addition, the group also appears to have entered a new era with the departure of founder Reed Hastings, who has stepped down as co-CEO to become “executive chairman”.

Among the big names on the NASDAQ, Microsoft and Amazon gained more than 3%, while Apple gained nearly 2%.

But tech news aside, the market has eased into a more impatient tone as the next policy meeting of the US Central Bank (Fed) Monetary Committee February.

Until then, Fed members enter a week of silence before the meeting.

On Friday, one of the governors of the Federal Reserve System, Christopher Ian Waller, spoke in favor of a quarter-point increase in the main interest rates at the next meeting of the monetary policy committee. In the previous meeting, the Fed raised the cost of credit by 50 basis points.

Given the “great news” of slowing inflation, “I think now is the time to slow down. […] rate of interest rate increase,” he added.

Commenting for AFP Art Hogan of B. Riley Wealth Management, investors welcomed “this moderation in tone from Fed officials.” “This will be a new pace” for interest rate hikes, the analyst added.

For Cresset Capital’s Jack Ablin, this new tone was also “good news”.

Moreover, according to him, the composition of the monetary committee for 2023 “will be more dovish”, that is, with a rotation of voting members, inclined to a more moderate monetary policy.

On the upside, online furniture retailer Wayfair’s move was appreciated (+20.25% to $46.79). The group, which has been very prosperous in the United States during the pandemic, announced that it will get rid of 10% of its employees, or 1,750 jobs.

Shares of Goldman Sachs fell 2.54% on a report as regulators (the Fed) launched an investigation into whether the bank was mishandling the growth of its consumer-facing business. The Wall Street Journal.

The name of the cryptocurrency trading platform Coinbase regained strength after two sessions of heavy losses (+11.61% to $55.16). Bitcoin was up 6.66% at $22,335 by 4:30 PM EST.

Eli Lilly’s lab was sanctioned after the FDA (-1.43%) denied an application for expedited approval to the US drug regulatory agency.

In the bond market, the yield on the 10-year Treasury note extended to 3.47% from 3.39% a day earlier.

Toronto Stock Exchange

The Toronto Stock Exchange advanced more than 150 points on Friday, supported by widespread gains, while major US indexes also rose with significant gains in the technology sector.

The Toronto floor’s S&P/TSX Composite Index rose 161.77 points to end the day at 20,503.21.

After a tough week, markets recovered some of their losses on Friday, observed Brian Madden, chief investment officer at First Avenue Investment Advisors.

Meanwhile, Toronto’s information technology sector advanced 2.4%, but because technology represents a relatively small part of the Canadian market compared to energy, industrials and finance, the TSX’s rise on Friday was less spectacular than in the US.

The technology sector’s gains on Friday were still only a small rebound from last year’s steep losses, Mr Madden said, and could signal some trading opportunities for investors looking to buy while prices are still low.

“A lot of these things hit really, really hard,” he said.

Madden noted that the past few days have seen investors be relatively quiet after a more risk-oriented fortnight to start the year. Investors are particularly looking ahead to the Bank of Canada’s key interest rate decision next week and the US Federal Reserve shortly after.

Meanwhile, Mr Madden expects several companies to take advantage of the new earnings season to try to lower the bar for 2023, which could help them get through more smoothly.

“We know that the rate hikes that went into effect a year ago are starting to have some bite and people are starting to feel it,” he said.

In the foreign exchange market, the Canadian dollar traded at an average of 74.51 cents, up from 74.23 cents in the US on Thursday.

Canadian Press

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