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Wall Street closed sharply lower on Tuesday following gloomy news across the world. Market participants seems clueless about the direction of U.S. stock markets’ movement as volatility grips Wall Street. All the three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 1% or 361.24 points to close at 34,946.39, terminating three straight positive closing. Notably, 28 components of the 30-stock index ended in negative territory, while 2 in positive zone. The tech-heavy Nasdaq Composite finished at 13,631.05, declining 1.1% or 157.28 points due to weak performance of large-cap technology stocks.
The S&P 500 slid 1.2% to end at 4,437.86. All 11 broad sectors of the benchmark ended in negative territory. The Energy Select Sector SPDR (XLE) advanced 1.6%, the Utilities Select Sector SPDR (XLU), the Financials Select Sector SPDR (XLF) and the Materials Select Sector SPDR (XLB) fell 2.1%, 1.6%, 1.8% and 1.6%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 11.1% to 16.46. A total of 10.1 billion shares were traded on Tuesday, lower than the last 20-session average of 10.9 billion. Decliners outnumbered advancers on the NYSE by a 5.24-to-1 ratio. On Nasdaq, a 2.54-to-1 ratio favored declining issues.
Fitch Warns of Bank Downgrade
Fitch Ratings warned that it may downgrade ratings of more than a dozen of U.S. heavyweight banks in near- future. The rating agency already cut its assessment of the U.S. banking sector in June. It said that another one notch downgrade of the banking sector’s rating from AA- to A+ will compel the rating agency to reevaluate the ratings of all 70 U.S, banks that it covers for possible downgrade.
China, the second largest economy of the world, the facing serious challenges as it failed to recover from the aftershock of COVID-19 so far. The country’s industrial production and retail sales grew less-than-expected in June. China is facing deflation and its prosperous real estate sector is on the verge of collapse. In order to generate growth and investors’ confidence, the People’s Bank of China lowered interest rates by 15 basis points to 2.5% from 2.65%. However, it failed to deliver so far.
On the other hand, Russia’s central bank sharply hiked the benchmark interest rate to 12% from 8.5% The move is aimed to restore the exchange value of its currency Rubble from a steady decline. The central bank has also said that it may hike interest rate further in near future.
Economic Data
The Department of Commerce reported that advanced retail sales in July increased 0.7% month-over-month, beating the consensus estimate of 0.4%. This marked the best monthly performance since January. The metric for June was revised upward to 0.3% from 0.2% reported earlier. Core retail sales (excluding auto sales) in July increased 1% month-over-month, beating the consensus estimate of 0.4%. This marked the best monthly performance since January. The metric for June was 0.2%.
The National Association of Home Builders/Wells Fargo Housing Market Index for August came in at 50 from a 13-month peak of 56 in July. This marked the first monthly decline of the index in 2023. Home builders’ confidence took a hit due to a drop in prospective buyer traffic.
Business inventories remained virtually unchanged for the month of June compared with May. Year over year, business inventories increased 0.2% in June.
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Stock Market News for Aug 16, 2023
Wall Street closed sharply lower on Tuesday following gloomy news across the world. Market participants seems clueless about the direction of U.S. stock markets’ movement as volatility grips Wall Street. All the three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 1% or 361.24 points to close at 34,946.39, terminating three straight positive closing. Notably, 28 components of the 30-stock index ended in negative territory, while 2 in positive zone. The tech-heavy Nasdaq Composite finished at 13,631.05, declining 1.1% or 157.28 points due to weak performance of large-cap technology stocks.
The S&P 500 slid 1.2% to end at 4,437.86. All 11 broad sectors of the benchmark ended in negative territory. The Energy Select Sector SPDR (XLE) advanced 1.6%, the Utilities Select Sector SPDR (XLU), the Financials Select Sector SPDR (XLF) and the Materials Select Sector SPDR (XLB) fell 2.1%, 1.6%, 1.8% and 1.6%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 11.1% to 16.46. A total of 10.1 billion shares were traded on Tuesday, lower than the last 20-session average of 10.9 billion. Decliners outnumbered advancers on the NYSE by a 5.24-to-1 ratio. On Nasdaq, a 2.54-to-1 ratio favored declining issues.
Fitch Warns of Bank Downgrade
Fitch Ratings warned that it may downgrade ratings of more than a dozen of U.S. heavyweight banks in near- future. The rating agency already cut its assessment of the U.S. banking sector in June. It said that another one notch downgrade of the banking sector’s rating from AA- to A+ will compel the rating agency to reevaluate the ratings of all 70 U.S, banks that it covers for possible downgrade.
Consequently, shares of banking behemoths like JPMorgan Chase & Co. (JPM - Free Report) , Bank of America Corp. (BAC - Free Report) and Wells Fargo & Co. (WFC - Free Report) tumbled 2.6%, 3.2% and 2.3%, respectively. JPMorgan Chase currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Global Concerns
China, the second largest economy of the world, the facing serious challenges as it failed to recover from the aftershock of COVID-19 so far. The country’s industrial production and retail sales grew less-than-expected in June. China is facing deflation and its prosperous real estate sector is on the verge of collapse. In order to generate growth and investors’ confidence, the People’s Bank of China lowered interest rates by 15 basis points to 2.5% from 2.65%. However, it failed to deliver so far.
On the other hand, Russia’s central bank sharply hiked the benchmark interest rate to 12% from 8.5% The move is aimed to restore the exchange value of its currency Rubble from a steady decline. The central bank has also said that it may hike interest rate further in near future.
Economic Data
The Department of Commerce reported that advanced retail sales in July increased 0.7% month-over-month, beating the consensus estimate of 0.4%. This marked the best monthly performance since January. The metric for June was revised upward to 0.3% from 0.2% reported earlier. Core retail sales (excluding auto sales) in July increased 1% month-over-month, beating the consensus estimate of 0.4%. This marked the best monthly performance since January. The metric for June was 0.2%.
The National Association of Home Builders/Wells Fargo Housing Market Index for August came in at 50 from a 13-month peak of 56 in July. This marked the first monthly decline of the index in 2023. Home builders’ confidence took a hit due to a drop in prospective buyer traffic.
Business inventories remained virtually unchanged for the month of June compared with May. Year over year, business inventories increased 0.2% in June.