By Yasin Ebrahim
Investing.com – The Nasdaq eased from record highs Friday, but remained supported as investors piled into growth corners of the market like tech amid concerns about global growth following fresh lockdowns in Europe.
The fell 0.08%, the slipped 0.73%, or 261 points, the Nasdaq gained 0.44% after hitting an intraday record of 16,121.1.
Austria said it would reimpose a nationwide lockdown on Monday to curb surging Covid-19 cases, raising concerns about the impact on the global economy as larger economies in the bloc including Germany could also introduce fresh restrictions.
“[S]uddenly markets are paying attention [to raising Covid-19 cases in Europe] perhaps because policy responses are beginning to emerge,” Scotiabank Economics said.
Against the backdrop of rising doubts about a possible slowdown in the global economy, investors piled into growth sectors like tech.
Meta, formerly Facebook (NASDAQ:), Google-parent Alphabet (NASDAQ:), Amazon (NASDAQ:), Microsoft (NASDAQ:) and Apple (NASDAQ:) traded higher.
Semiconductor stocks also supported the broader tech sector as a surge in Micron Technology (NASDAQ:) offset weakness in Applied Materials.
Applied Materials (NASDAQ:) reported third-quarter results and fourth-quarter guidance that fell short of estimates as supply shortages continue to weigh on growth. Its shares fell more than 4%.
The gains in consumer discretionary stocks, one of the best performing sectors this week, continued, with Nike (NYSE:) and Tesla (NASDAQ:) up more than 2%.
Investor jitters over a slowdown in the global recovery dragged cyclical stocks lower, with energy and financials taking on the brunt of the selling pressure.
Energy fell more than 3% and is on track for second-weekly losses as oil prices fell below $80 a barrel on concerns fresh restrictions in Europe will dent oil demand.
Devon Energy (NYSE:), Hess (NYSE:), Baker Hughes (NYSE:) all fell more than 5% and led the selloff in the energy sector.
Travel-related stocks including United Airlines (NASDAQ:), Carnival (NYSE:) and Airbnb (NASDAQ:) were under pressure as investors eased bets on the reopening trade.
In health care, meanwhile, Moderna (NASDAQ:) was the standout performer, racking up a 6% gain after the Food and Drug Administration authorized Covid vaccine booster shots for all U.S. adults. Pfizer’s vaccine also received approval.
On the political front, the House of Representatives passed President Biden’s $1.75 trillion “human infrastructure” package, or Build Back Better Act.
The legislative measure will progress to the Senate, where Democrats hope to pass it using the budget reconciliation process, without Republican support.
The bill will likely have to be revised as centrists such as Sen. Joe Manchin of West Virginia have balked at its hefty price tag, and “question claims the initiative was fully paid for,” Stifel said.
“The bill would contribute $791B to the deficit in the next five years and $367B to the deficit over the coming 10 year period,” Stifel added, citing findings from the Congressional Budget Office.
Stats had a positive effect on the European stock market. European growth stocks
West European stock indexes closed Wednesday’s trading with a confident growth. Traders evaluated the fresh batch of statistics and bought European growth stocks.
What influenced European stocks to high growth?
GDP volume in France rose 0.2% in the third quarter compared to the previous three months, final data from the national statistics institute Insee showed. The final data coincided with a preliminary estimate. Analysts, on average, had not expected a revision, according to a Trading Economics survey. GDP growth slowed from a 0.5% rebound in the second quarter.
Consumer prices in France, harmonized with European Union standards, rose 7.1% year-over-year in November. Insee also reported. The November rate of increase in consumer prices coincided with that of October, and analysts polled by Trading Economics expected inflation to remain at the same level.
Consumer spending in the country collapsed by 2.8% in October compared with the previous month. Analysts polled by Bloomberg expected a more moderate decline of 1 percent. The consensus forecast of experts polled by Trading Economics envisioned a 0.6% decline. The decrease in consumer spending was the maximum since April 2021.
The number of unemployed in Germany increased by 17 thousand in November, according to the Federal Employment Agency of Germany. The rise in the index was marked at the end of the sixth month in a row. Experts interviewed by Bloomberg agency, on average, predicted an increase of 13.5 thousand. Respondents to Trading Economics expected an increase of 13 thousand.
Additional positives for investors in European markets on Wednesday were messages about easing of coronavirus restrictions in a lot of cities in China. Note that Amazon’s stock price is also rising if you are interested in the U.S. stock market.
Earlier, we reported that U.S. stock indices were up 2.2-4.4%.
U.S. stock indices today rose 2.2-4.4%
The U.S. stock indices today closed the trading on Wednesday with the confident growth due to the statements of the Federal Reserve Chairman, Jerome Powell, who confirmed that the U.S. Central Bank could slow down the basic rate rise as early as in December.
Judging by the quotations of futures on the level of the prime rate, U.S. stock market indices expect the Federal Reserve to raise it by 50 basis points (bps) in December – to 4.25-4.5%. The U.S. Central Bank has increased the rate by 75 bps at each of the previous four meetings. Against this background, the current stock price of Facebook also rose.
The report by the industry organization ADP, published on Wednesday, showed a slowdown in job growth in the U.S. private sector. Their number increased by 127,000 in November, the lowest rate since January, said the ADP. Analysts polled by The Wall Street Journal on average had forecast job growth of 190,000 after a jump of 239,000 in October.
Data from the U.S. Commerce Department, also released Nov. 30, showed higher-than-reported growth in the U.S. economy in the third quarter. U.S. GDP grew at an annualized rate of 2.9% in the July-September quarter, rather than the previously reported 2.6%. Experts polled by Trading Economics had expected an average revision of 2.7%.
Also, the Federal Reserve released its regional Beige Book survey Wednesday, showing that economic activity in the United States was little changed in the fall.
Federal Reserve banks in five counties reported a weak increase in activity in October and November, while the other seven reported a stable or slightly declining economy.
The Dow Jones Industrial Average index was up 737.24 points (2.18%) at 34589.77 as of Wednesday’s market close.
Standard & Poor’s 500 rose 122.48 points (3.09%) to 4,080.11 points.
The Nasdaq Composite added 484.22 points (4.41%) to 1,468.
All three U.S. stock market indices closed November, with the Dow Jones gaining 5.3%; the S&P 500 gaining 4.6%, and the Nasdaq Composite gaining 3.3%.
Earlier we reported that Main European stock indices were rising during trading.
Main European stock indices rise in trading
Main European stock indices are rising during trading on Thursday. The Stoxx Europe 600 composite index of the largest companies in the region rose 0.58% to 442.60 points. German DAX is up 0.34%, British FTSE 100 is up 0.15%, French CAC 40 is up 0.01%, Italian FTSE MIB is up 0.47% and Spanish IBEX 35 is up 0.45%.
What affected the best European stock indices?
During a speech at the Brookings Institution on Wednesday, Powell reiterated that the Fed could slow the rise in the prime rate as early as December. “The time to moderate the pace of rate hikes may come as early as the next meeting,” Powell said.
The Fed chair, meanwhile, tried to balance those words with “hawkish” signals. Market Watch notes. He said that the U.S. Central Bank will have to raise the rate higher than could be expected a few months ago. Moreover, Powell made it clear that the issue of rate cuts is irrelevant at the moment. By the way, his words influenced the growth of the current stock price of the NASDAQ-100.
Another Fed official, Board of Governors member Lisa Cook said she believes the regulator needs to keep raising rates as inflation is still too high. “We’ve started to get more favorable inflation data. But I would be cautious about drawing big conclusions on just one month’s worth of data,” Cook said during a speech at the Detroit Economic Club.
Earlier, we reported on how European stock indexes were falling following Asian stock markets.
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