Traders work on the floor of the New York Stock Exchange (NYSE) on October 20, 2023 in New York City, USA.Reuters/Brendan McDiarmid/File Photo Obtaining license rights
NEW YORK, Oct 23 (Reuters) – U.S. stocks closed mixed on Monday as the benchmark U.S. Treasury yield retreated from 5% and investors turned their attention to this week’s hot earnings and economic data. .
Although the S&P 500 index ended slightly lower, many momentum stocks that are sensitive to interest rates pushed up the tech-heavy Nasdaq Composite Index, leading to a higher closing price.
The Dow Jones Industrial Average fell for the fourth day in a row.
“The conversation continues to be about interest rates, and to some extent there has been a shift from thinking ‘they’re going to be high for a long time’ to ‘how high and for how long?'” said Oliver Paasche, senior vice president at Wealthspire Advisors in New York. “It’s happening,” he said. “The market has accepted the idea that the Fed will not cut rates anytime soon,” he said.
The tech-heavy Nasdaq posted the biggest gain of any major Wall Street index, while the blue-chip Dow Jones Industrial Average fell nominally.
The S&P 500 ended below its 200-day moving average, which is attracting attention as a technical level, for the second consecutive day.
The coming week is expected to be a turbulent one, with nearly one-third of S&P 500 companies reporting earnings results.
These include companies that drive the momentum of giant stocks such as Microsoft Corp. (MSFT.O), Alphabet Inc. (GOOGL.O), Metaplatforms Inc. (META.O), and Amazon.com (AMZN.O). In addition to this, it also includes industries that were hit hard, such as general. Motors (GM.N), Ford Motor (FN), Boeing (BA.N).
“Nearly one-third of the S&P has reported earnings this week, and investors are looking forward to seeing these ‘great seven’ finish with unexpected gains,” said Sam Stovall, chief investment strategist at CFRA Research in New York. I look forward to it.”
To date, 86 companies in the S&P 500 have announced earnings. Of those, 78% exceeded expectations, according to LSEG data.
Analysts expect S&P 500 companies’ total profits to rise 1.2% in the July-September period from a year ago, slightly below the 1.6% increase expected at the beginning of the month, according to LSEG.
The Commerce Department is scheduled to release third-quarter gross domestic product (GDP) data on Thursday, with growth expected to accelerate to 4.3%. The broader Personal Consumption Expenditure (PCE) report, to be released on Friday, expects annual headline and core inflation to fall to 3.4% and 3.7%, respectively.
“The Fed wants to slow inflation faster than it slows economic growth, and that’s what it’s doing,” Poursche added. “That’s the classic definition of a soft landing.”
Geopolitical turmoil is also on guard, with market participants looking for potential signs that the conflict between Israel and Hamas could expand or intensify.
The Dow Jones Industrial Average (.DJI) fell 190.87 points, or 0.58%, to $32,936.41. The S&P 500 (.SPX) fell 7.12 points, or 0.17%, to 4,217.04. The Nasdaq Composite Index (.IXIC) rose 34.52 points (0.27%) to 13,018.33.
Of the 11 major sectors in the S&P 500, communications services (.SPLRCL) rose the most, while energy stocks (.SPNY) recorded the biggest decline.
Walgreens Boots Alliance (WBA.O) jumped 3.3% after JPMorgan upgraded the pharmacy chain operator to “overweight” from “neutral.”
Chevron (CVX.N) fell 3.7% after the company announced it would buy smaller rival Hess Corporation (HES.N) in a $53 billion all-stock deal. Hess fell 1.1%.
Agricultural science company FMC (FMC.N) fell 13.2% after the company lowered its outlook for the third quarter.
Declining issues outnumbered advancing issues on the New York Stock Exchange by a 2.10-to-1 ratio. On the Nasdaq, a 2.04-to-1 ratio favored declining stocks.
The S&P 500 posted one new 52-week high and 58 new new lows. The Nasdaq Composite Index recorded 14 new highs and 514 new lows.
Volume on U.S. exchanges was 10.8 billion shares, with the average overall trading volume over the past 20 trading days being 10.67 billion shares.
Report by Stephen Culp. Additional reporting by Shubham Batra and Shashwat Chauhan in Bengaluru.Editing: Richard Chan
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