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Thursday, March 23, 2023

Wall Street Opens Mostly Lower as Rates, Covid Concerns Weigh; Dow Down 130 Pts By Investing.com

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© Reuters

By Geoffrey Smith 

Investing.com — U.S. stock markets opened mixed on Monday, with lingering fears about interest rate hikes and negative pandemic-related newsflow both weighing on sentiment. 

By 9:40 AM ET (1440 GMT), the was down 135 points, or 0.4%, at 34,590 points, but the was down less than 0.1% and the , after a rough month, was up 0.9% on bargain-hunting in names seen as oversold.

Goldman Sachs (NYSE:) analysts David Mericle and Jan Hatzius said in a note on Friday that they now expect the Federal Reserve to raise interest rates five times this year, a view that is fast becoming consensus. That’s due not least to the risk that the supply side disruptions that have squeezed prices higher for the last year may yet hang around for longer. A report by Danish scientists suggests that a new subvariant of the Omicron-version of Covid-19 has started to spread, and is at least 1.5 times as infectious as the original Omicron variant. That was in turn more infectious than Delta, the previously dominant variant. 

New infection numbers have been falling across the U.S. for the last two weeks, but the emergence of a new and more infectious strain could prolong the wave of absenteeism seen during January.

On a relatively quiet morning for corporate news, Netflix (NASDAQ:) stock stood out with a gain of 7.5% after analysts at Citi upgraded it, saying it had oversold in the wake of its disappointing fourth-quarter numbers and first-quarter guidance last week. The stock had fallen to its lowest since March 2020 after warning of a sharp slowdown in subscriber acquisition and higher costs for new content.

The importance of constant new content releases was underlined earlier in a Wall Street Journal analysis showing that nearly half of the subscribers who joined HBO, Disney+ and Peacock ahead of specific content releases had let their memberships lapse within six months. Walt Disney (NYSE:) stock, which is exposed to trends in both streaming and Covid-19, rose 1.2%.

Tesla (NASDAQ:) stock, another to have sold off heavily last week after postponing new product launches until at least 2023, also attracted dip-buyers, rising 5.5% to $893. At that level, the stock still trades at over 12 times expected sales this year, and an eye-watering 173 times trailing earnings. 

Another stock rebounding sharply was Spotify (NYSE:), which rose 9.7% after the audio streaming company said it would attach health warnings to podcasts that challenged broadly-accepted science on issues such as the pandemic. In related developments, comedian Joe Rogan apologised for platforming speakers who had cast doubt on the efficacy of Covid-19 vaccines, leading to a boycott of Spotify by a handful of prominent artists.

Elsewhere, Citrix (NASDAQ:) stock fell 3.0% after reports indicating that the buyout price for the company offered by Elliott Management and Vista will be below previous expectations. Otis (NYSE:) stock rose 1.6%, shrugging off a warning about weak sales growth this year due to the ongoing real estate crisis in China that is weighing on orders for elevators.

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