US service sector growth bodes well for Wall Street

Upbeat macroeconomic data from the US services sector was a driving factor in New York stock markets on Thursday. Activity in the restaurants and tourism sectors unexpectedly picked up, seen by investors as a sign that the overall US economy is not doing badly. Concerns were raised last week when it emerged that the US economy shrank in the second quarter.

The company’s figures also created a positive sentiment in the stock market. Ahead of earnings season, many analysts feared profit warnings and disappointing sales figures due to high inflation, but it’s not all bad.

The Dow-Jones index rose 1.3 percent to 32,812.50, the broad-based S&P 500 added 1.6 percent to 4,155, up 17 points, and the Tech Nasdaq added 2.6 percent to 12,668.16.

Paypal was one of the additional winners on Wall Street, up more than 9 percent. The company remains very optimistic for the rest of the year and intends to buy back $15 billion of its own stock. Investor Elliott Management also announced that it has taken a stake in the company.

Moderna also performed well, advancing 16 percent. The biotech continued to perform well with its corona vaccine in the second quarter.

On the other hand, the competition group fell by almost 18 percent. The company behind dating app Tinder is saying goodbye to Dutch frontwoman Renate Nyborg after less than a year. He left the company following disappointing quarterly results.

Fast food company Yum! Brands fell 1.9 percent. The owner of snack chains such as KFC, Pizza Hut and Taco Bell posted higher sales but saw its quarterly profit fall. Airbnb fell 1.1 percent. The rental platform benefited from the recovery in the travel industry last quarter, but expectations for the current quarter were somewhat disappointing.

Starbucks rose 4.3 percent. The coffee chain has compensated for lower yields due to severe corona lockdowns in China and higher prices elsewhere. AMD lost 3.3 percent. The chipmaker performed better than expected last quarter, but disappointed expectations for the current quarter.

Oil prices fell after the oil cartel OPEC and its allies decided to slightly increase production. U.S. crude fell 3.8 percent to $90.80 a barrel. Brent crude was down 3.5 percent at $96.98 a barrel. The euro was at $1.0169, down from $1.0142 at the closing hour in Europe.