Wall Street: Wall Street down, eyes on the Fed and the results

PARIS (Reuters) – The New York Stock Exchange opened lower on Tuesday amid risk aversion at the start of the corporate earnings season and on expectations of higher interest rates in the United States .

In early trading, the Dow Jones index lost 564.22 points, or 1.57%, to 35,347.59 points and the broader Standard & Poor’s 500 fell -1.51% to 4,592.33 points.

The Nasdaq Composite lost 1.92%, or 286.31 points, to 14,607.44.

The Federal Reserve’s monetary policy committee meets on January 25 and 26 and investors expect a rate hike cycle from March.

In terms of company results, the major Wall Street banks kicked off the publication of financial accounts for the October-December period last week.

Goldman Sachs Group, down 7.9%, on Tuesday reported a nearly 13% drop in fourth-quarter profit, which came in below expectations as weak trading activity overshadowed a exceptional year in terms of mergers and acquisitions for the first investment bank on Wall Street.

In mergers and acquisitions, Microsoft (-1.5%) and Activision Blizzard (+ 29.4%) are driving the trend with the announcement on Tuesday of the acquisition of the second by the first for an amount of 68.7 billion dollars. (59.5 billion euros) in cash.

Electronic Arts, Take-two interactive software and Zynga take 6%, 2.4% and 0.8% respectively.

On the bond market, the yield on two-year US Treasury bills, the most sensitive to changes in rate expectations, jumped more than 4.5 basis points to 1.0119%, while the ten-year deals at 1.8287%, up 5.5 points.

In terms of economic indicators, manufacturing activity in the New York area contracted sharply in January, falling into negative territory for the first time since June 2020, shows Tuesday the monthly survey of the regional branch of the Federal Reserve.

(Written by Claude Chendjou, edited by Sophie Louet)

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