Frankfurt Wall Street sentiment has brightened after a week of losses. The US leading index Dow Jones gained 1.2 percent compared to the previous day and is at 33,508 points. The tech index Nasdaq climbed 1.8 percent to 12,175 points. And the broad S&P 500 gains 1.4 percent and is trading at 4118 points.
Above all, strong quarterly figures from Apple support the New York Stock Exchange on Friday. The US tech group posted the second consecutive decline in quarterly sales. However, the minus was only a little more than half as high as feared. Apple’s revenue from the iPhone smartphone model even grew surprisingly by 1.5 percent to $51.33 billion.
“It’s been a rough week for the stock market and the woes at the US regional banks added to the fear factor, but the Apple numbers were really strong,” said Peter Cardillo, chief economist at investment adviser Spartan Capital Securities.
Breathing easy at US regional banks after turbulence
The stocks of the US regional banks, which crashed on Thursday after the bankruptcy of the First Republic Bank and the problems at Pacwest, also embarked on a recovery course.
At times, Pacwest and Western Alliance’s shares gained as much as 80 and 40 percent, respectively. Competitors such as Zion, Keycorp, First Horizon and Comerica are also up. They made up for their losses from Thursday.
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A media report about a possible sale of the Western Alliance, which the money house has denied, pushed the share down by 30 percent on Thursday. Rival Pacwest had previously slipped into crisis. In discussions with investors, she is looking for strategic ways out and apparently wants to avoid the fate of the First Republic, which went to JP Morgan in an emergency sale.
According to Reuters calculations, 16 medium-sized banks have lost more than $57 billion in market capitalization since last Friday. The KBW Regional Banking Index fell by a good 30 percent this year. In this month alone it has lost a good twelve percent.
“We clearly have a situation where the market is examining the weakest links after Silvergate, Silicon Valley Bank and First Republic,” said financial market expert Russ Mold of brokerage house AJ Bell.
In addition, surprisingly robust US labor market data eased recession fears following the series of interest rate hikes by the US Federal Reserve. In April, 253,000 new non-farm jobs were added. Economists polled by Reuters had expected just 180,000. “It’s a strong report. It shows the job market is resilient and justifies the Fed’s latest 25 basis point rate hike,” said Spartan Capital Securities Chief Economist Cardillo.
Gold under pressure as oil prices rise
The expectation of further rate hikes after the strong US labor market data weighed on the price of gold. Gold fell by almost two percent to around 2015 dollars a troy ounce.
Recently, the currency had been able to increase significantly after an end to the cycle of interest rate hikes was indicated. “Gold does not pay any interest itself and thus benefits from an environment characterized by falling or low interest rates,” said commodity expert Alexander Zumpfe from precious metal trader Heraeus.
Meanwhile, oil prices rose. Analysts spoke of a purely technical chart recovery after three weeks of losses. BOK Financial’s Dennis Kissler said it was attempting to offset the recent fall in prices triggered by concerns about interest rates, banks and demand.
The North Sea variety Brent and the light US variety WTI each increased in price by around 3.5 percent to 74.97 and 71.04 dollars per barrel (159 liters).
Look at other individual values:
Apple: Apple shares gained 4.5 percent. The US group posted the second decline in quarterly sales in a row. However, the minus was only a little more than half as high as feared. Revenues from iPhones even grew surprisingly by 1.5 percent to $51.33 billion.
Pacwest: Pacwest shares are recovering about 68 percent. On Thursday, the US Regional Bank’s values plummeted more than 40 percent after the financial institution said it was reviewing strategic options.
Western Alliance: Western Alliance’s stock price rises more than 38 percent. Yesterday, the shares lost around 60 percent in value. The bank subsequently denied a media report about a possible sale.
More: Shares in regional banks plummet after Fed rate hike