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Stock market: Wall Street closes lower, driven by profit taking

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MARKET REVIEW. The New York Stock Exchange closed sharply lower on Thursday, weighed down by profit taking on the last day of a quarter rich in twists and turns.

The Toronto Stock Exchange closed lower on Thursday, weighed down by pessimism about the war in Ukraine and the decline in crude oil prices, but that did not prevent it from experiencing, for the whole of March, its best month since October.

To (re)consult market news

Stock market indices at closing

In Toronto, the S&P/TSX fell 185.80 points (-0.84%) to 21,890.16 points.

In New York, the S&P500 ended down 72.04 points (-1.57%) at 4,530.41 points.

the Nasdaq fell 221.76 points (-1.54%) to 14,220.52 points.

the DOW retreated 550.46 points (-1.56%) to 34,678.35 points.

the loon retreated US$0.0014 (-0.1784%) to US$0.7999.

the oil dropped US$7.05 (-6.54%) to US$100.77.

gold gained US$2.70 (+0.14%) to US$1,941.70.

the bitcoins ended down US$1,404.86 (-2.98%) at US$45,801.09.

The context

“What had the most influence on the market was the fact that it was the last day of the quarter, during which there was a significant rotation from equities to bonds,” explained Karl Haeling, analyst at LBBW.

On Wednesday, JPMorgan analysts estimated the average weight of bonds in portfolios to be just 18%, the lowest since 2008.

“We have just experienced one of the worst quarters in history for bonds,” noted Karl Haeling, believing, like JPMorgan analysts, that the bond market could soon experience a rebound.

Thursday’s movement benefited a good part of the maturities on the bond market, from three months to 30 years, which fell from 2.47% to 2.44%. Bond prices move in the opposite direction to their rates.

According to analysts at Briefing.com, some of the investors took profits after more than two weeks of a wild ride.

Over the quarter, however, the S&P 500 lost 4.94% and the Dow Jones 4.56%.

In this context, President Joe Biden’s announcement of a withdrawal of 180 million barrels from American strategic reserves to relieve the black gold market had little effect.

The news caused the price of a barrel of WTI (West Texas Intermediate), the main American variety, to fall by almost 7%, “but the impact on other markets was limited, because everyone knows that it is temporary”, raised Karl Haeling.

Also, “it doesn’t change the inflation forecast much,” he added.

On Thursday, the spread between the rate of inflation-protected bonds, known as TIPS, and that of conventional ten-year government bonds, which measures inflation expectations, thus contracted only very slightly and remains very high, the highest for almost a quarter of a century.

On the odds, only the oil companies have really suffered from Joe Biden’s announcement. ExxonMobil (XOM) (-1.42%), Herringbone (CVX) (-1.60%) or Conoco Phillips (COP) (-1.09%) all lost ground.

Elsewhere, the semiconductor maker AMD (AMG) he suffered (-8.29% to 109.34 $US) from a lowering of recommendation from Barclays, which fears a slowdown in the sector. It dragged its rivals Intel (-3.64%) and Micron (-1.60%) in its wake.

Against the tide, cruise passengers have stayed the course, still supported by a new opinion from the Centers for Disease Prevention and Control (CDC), the main American health agency, which no longer recommends avoiding cruises to avoid contracting the coronavirus.

Carnival (CCL) (+3.16%), Norwegian (NCLH) (+3.11%) and Royal Caribbean (RCL) (+ 2.82%) thus began the whole session in the green.

HP (HPE) was penalized (-6.54% to US$36.30), as well as Dell, after the lowering of Morgan Stanley’s recommendation, which foresees difficulties on the PC market due to the uncertainty on the economic situation economic.

The pharmacy chain Walgreens (WBA) did not benefit (-5.67% to US$44.77) from better-than-expected quarterly results, supported by Covid-19 vaccinations and tests, investors worried about a possible slack in the coming quarters.

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