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US open: Stocks in the black as traders pick up some bargains

By Michele Maatouk

Date: Friday 24 Jun 2022

US open: Stocks in the black as traders pick up some bargains

(Sharecast News) - US stocks rose in early trade on Friday as traders scaled back rate hike expectations and stepped in to pick up a few bargains at the end of the week.
At 1450 BST, the Dow Jones Industrial Average was up 1.3%, while the S&P 500 and the Nasdaq were ahead 1.5% and 1.9%, respectively.

Neil Wilson, chief market analyst at Markets.com, said: "Recession fears mean the market has dialled back its expectations for just how the far the Fed will go, which is helping growth stocks to mount a defence. PMIs are declining and lower commodity prices have the market more focused on slowdown than searing inflation, which seems on-balance net positive for stocks.

"But this masks lots and we don't know how far earnings estimates need to come down...arguably the multiple compression we have seen points to the market already pricing in lower earnings growth, not just a higher risk-free rate. Frankly the give-back in yields looks complacent but there might be more of it before bonds are sold again."

Still to come on the macro front, investors were eyeing the release of new home sales data for May at 1500 BST, as well as the Michigan consumer sentiment index for June.

In corporate news, Zendesk surged after the San Francisco-based software maker agreed to be bought by an investor group led by private equity firms Permira and Hellman & Friedman in a $10.2bn all-cash deal. Under the terms of the agreement, Zendesk shareholders will receive $77.50 per share, which is a premium of around 34% to the closing share price on Thursday.

FedEx also rallied after the parcel delivery company's full-year profit forecast came in better than expected, while cruise operator Carnival rose after well-received second-quarter results.

Elsewhere, banks were in focus, with Goldman Sachs and Bank of America both trading up after the Federal Reserve announced late on Thursday that all banks had passed its annual stress test.


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