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U.S. stocks ended lower on Wednesday despite another batch of mostly impressive earnings reports, as a rise in Treasury yields failed to sustain the rally that started earlier this week. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.3% or 99.99 points to close at 30,423.81 points.
The S&P 500 fell 0.7% or 24.82 points to finish at 3,695.16 points. Real estate and financial stocks were the worst performers on the index.
The Real Estate Select Sector SPDR (XLRE) dropped 2.5%, while the Financials Select Sector SPDR (XLF) declined 1.6%. The Energy Select Sector SPDR (XLE) gained 3%. Nine of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq lost 0.9% or 91.89 points to end at 10,680.51 points.
The fear-gauge CBOE Volatility Index (VIX) was up 0.85% to 30.76. Decliners outnumbered advancers on the NYSE by a 3.28-to-1 ratio. On Nasdaq, a 2.69-to-1 ratio favored declining issues. A total of 11.05 billion shares were traded on Wednesday, lower than the last 20-session average of 11.22 billion.
Rise in Bond Yields Weigh on Markets
Wall Street opened the week on a high as positive earnings reports from a batch of big companies gave a boost to investors’ confidence, sending stocks on a rally. So far, it has been a great start to the earnings season.
The positive sentiment continued early on Wednesday, following another batch of solid corporate earnings reports. Among the big names, The Procter & Gamble Company (PG - Free Report) reported impressive quarterly results. Procter & Gamble reported quarterly earnings of $1.57 per share, beating the Zacks Consensus Estimate of $1.55 per share.
Netflix, Inc. (NFLX - Free Report) , which posted both earnings and revenue beat on Tuesday after the close, saw its shares jumping 13.1% on Wednesday. The company also reported strong subscriber growth in the last quarter. Netflix has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
So far, 45 companies from the S&P 500 have reported quarterly results, with 69% surpassing profit estimates.
Despite a positive start to the earnings season, a rise in treasury yields offset the rally on Tuesday. The 10-year Treasury yield rose as high as 4.136%, its highest level since June 2008. The 2-year Treasury yield also jumped to its highest level since 2007 on fears of another 75-basis point interest rate hike in November.
Higher interest rates are impacting the housing market the most, as fresh data showed housing starts declining more than expected in September. Also, the high-growth tech stocks suffered once again on Wednesday as bond yields rose.
Among the biggest losers on Wednesday was JD.com, Inc. (JD - Free Report) , which saw its shares tumble 7.7%. Shares of Alphabet Inc. (GOOGL - Free Report) and Microsoft Corporation (MSFT - Free Report) declined 1.1% and 0.9%, respectively.
Economic Data
Economic data released on Wednesday showed that housing starts declined 8.1% in September, high than expected, to a seasonally adjusted annual rate of 1.44 million, down from August’s revised figures of 1.56 million, according to the Census Bureau.
Construction of new single-family homes fell 4.7% to 892,000, the lowest level since 2007. The rate for units in buildings with five units or more dropped 13.1% to 530,000 in September.
However, building permits increased 1.8% in September on a month-over-month basis to an annualized rate of 1.56 million, surpassing expectations of 1.53 million.
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Stock Market News for Oct 20, 2022
U.S. stocks ended lower on Wednesday despite another batch of mostly impressive earnings reports, as a rise in Treasury yields failed to sustain the rally that started earlier this week. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.3% or 99.99 points to close at 30,423.81 points.
The S&P 500 fell 0.7% or 24.82 points to finish at 3,695.16 points. Real estate and financial stocks were the worst performers on the index.
The Real Estate Select Sector SPDR (XLRE) dropped 2.5%, while the Financials Select Sector SPDR (XLF) declined 1.6%. The Energy Select Sector SPDR (XLE) gained 3%. Nine of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq lost 0.9% or 91.89 points to end at 10,680.51 points.
The fear-gauge CBOE Volatility Index (VIX) was up 0.85% to 30.76. Decliners outnumbered advancers on the NYSE by a 3.28-to-1 ratio. On Nasdaq, a 2.69-to-1 ratio favored declining issues. A total of 11.05 billion shares were traded on Wednesday, lower than the last 20-session average of 11.22 billion.
Rise in Bond Yields Weigh on Markets
Wall Street opened the week on a high as positive earnings reports from a batch of big companies gave a boost to investors’ confidence, sending stocks on a rally. So far, it has been a great start to the earnings season.
The positive sentiment continued early on Wednesday, following another batch of solid corporate earnings reports. Among the big names, The Procter & Gamble Company (PG - Free Report) reported impressive quarterly results. Procter & Gamble reported quarterly earnings of $1.57 per share, beating the Zacks Consensus Estimate of $1.55 per share.
Netflix, Inc. (NFLX - Free Report) , which posted both earnings and revenue beat on Tuesday after the close, saw its shares jumping 13.1% on Wednesday. The company also reported strong subscriber growth in the last quarter. Netflix has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
So far, 45 companies from the S&P 500 have reported quarterly results, with 69% surpassing profit estimates.
Despite a positive start to the earnings season, a rise in treasury yields offset the rally on Tuesday. The 10-year Treasury yield rose as high as 4.136%, its highest level since June 2008. The 2-year Treasury yield also jumped to its highest level since 2007 on fears of another 75-basis point interest rate hike in November.
Higher interest rates are impacting the housing market the most, as fresh data showed housing starts declining more than expected in September. Also, the high-growth tech stocks suffered once again on Wednesday as bond yields rose.
Among the biggest losers on Wednesday was JD.com, Inc. (JD - Free Report) , which saw its shares tumble 7.7%. Shares of Alphabet Inc. (GOOGL - Free Report) and Microsoft Corporation (MSFT - Free Report) declined 1.1% and 0.9%, respectively.
Economic Data
Economic data released on Wednesday showed that housing starts declined 8.1% in September, high than expected, to a seasonally adjusted annual rate of 1.44 million, down from August’s revised figures of 1.56 million, according to the Census Bureau.
Construction of new single-family homes fell 4.7% to 892,000, the lowest level since 2007. The rate for units in buildings with five units or more dropped 13.1% to 530,000 in September.
However, building permits increased 1.8% in September on a month-over-month basis to an annualized rate of 1.56 million, surpassing expectations of 1.53 million.