Wall Street continues to recover while waiting for the Fed
The New York Stock Exchange ended sharply on Friday, buoyed by healthy results from cyclical companies like Caterpillar (+3.3%) and Honeywell (+4.3%) and reassuring statistics about inflation that revived investors’ appetite for risk ahead of the Fed meeting.
The sharp decline in Amazon.com (-6.8%), after its disappointing forecast for the fourth quarter, was offset by a sharp rise in Apple (+7.6%) and cyclical stocks. The stock market showed strong resilience as buyers were not deterred by the bond yields rebound, with the 10-year bond yield ending above 4.00%, up 7 basis points.
Ten sectors out of 11 closed higher, led by IT (+4.5%). The sector was boosted by Apple, but Intel (+10.7%) posted larger gains thanks to its quarterly results and the announcement of a $10 billion cost cut. In contrast, the consumer discretionary segment (-0.3%) was the worst performer due to the fall of Amazon. With that said, the sector recovered well after losing 3.8%.
Moreover, the market showed resilience, continuing to recover despite the economic data that should not prompt the Fed to reconsider its monetary tightening. Personal incomes and spending were strong, employment costs for the third quarter slowed slightly but remained elevated and consumer confidence was revised slightly higher. Only pending home sales fell.