[New York Market Briefing] Investor sentiment holds despite U.S. airstrikes on Venezuela… three major indices all 'rise'

Major indices on the U.S. New York market all rose. Although geopolitical tensions flared after the U.S. invaded Venezuela, the market appeared busy looking for beneficiary stocks.

On the 5th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 48,977.18, up 594.79 points (1.23%) from the previous session. The Standard & Poor's (S&P) 500 index rose 43.58 points (0.64%) to 6,902.05, and the Nasdaq closed up 160.19 points (0.69%) at 23,395.82.

The Dow Jones index set a new intraday record and also closed at a record high.

By sector, financials and energy rose more than 2%, while consumer discretionary, materials and industrials rose more than 1%. Utilities fell 1.16%.

The U.S. said it would arrest Nicolás Maduro, President of Venezuela, and intervene in rebuilding Venezuela's oil industry, drawing the market's attention to related stocks. Estimates suggest that restoring Venezuela's oil infrastructure could cost about $100 billion over the next 10 years.

Among major U.S. refiners, Chevron — the only company currently doing business in Venezuela — drew market attention as its shares jumped 5.1%. Exxon Mobil rose 2.21% and ConocoPhillips rose 2.59%.

Oilfield services and equipment manufacturers also drew significant attention. Within the oil equipment and services index, Schlumberger, the largest by market capitalization, jumped 8.96%, Baker Hughes rose 4.09%, and Halliburton jumped 7.84%.

Valero Energy also surged 9.23%. Valero is based on the Gulf of Mexico coast and is regarded as one of the few companies capable of processing large volumes of heavy and sour crude oil (crude with high sulfur content).

U.S. President Donald Trump warned that, after Venezuela, he could topple regimes in Iran, Cuba and Colombia as well, boosting defense stocks. Lockheed Martin rose 2.92%.

Sam Stovall, chief investment strategist at CFRA Research, said, "In the short term, oil prices could rise due to uncertainty over supply and transportation," while adding, "In the long term, because the situation has deteriorated over the past few years, U.S. intervention could lead to positive outcomes."

Bank stocks also rose on expectations of indirect benefits from a Maduro regime collapse. JPMorgan rose 2.63%, Bank of America 1.68%, Morgan Stanley 2.55%, and Goldman Sachs 3.73%.

Venezuela has been in default on more than about $60 billion of external debt since 2017. If Maduro is ousted and U.S.-Venezuela relations normalize, restructuring of Venezuelan sovereign debt and bonds of the state oil company (PDVSA) is likely to accelerate. Investment banks could expect large advisory fees and transaction brokerage revenues in the process.

Among mega tech companies with market capitalizations over $1 trillion, Amazon and Tesla rose around 3%, while Apple, NVIDIA, Broadcom and Microsoft fell about 1%.

The U.S. manufacturing sector remained in contraction for the 10th consecutive month. The Institute for Supply Management (ISM) reported that the December manufacturing purchasing managers' index (PMI) was 47.9, down 0.3 points from November's 48.2.

According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market priced in an 83.9% probability of a rate hold in January, nearly unchanged from late the previous trading session.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose 0.39 points (2.69%) to 14.90.

Jin Young-gi, Hankyung.com reporter young71@hankyung.com