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Wall Street closed mixed on Wednesday after a sharp fall on previous day. Market participants remained highly concerned about soaring yields on sovereign bonds, a spike in crude oil prices and increasing U.S. dollar price index. The S&P 500 and the Nasdaq Composite ended in positive territory, while the Dow finished in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.2% to close at 33,550.27. Notably, 28 components of the 30-stock index ended in negative territory, while 2 ended in positive territory. At its intraday high, the blue-chip index was up nearly 113 points. On Sep 26, the index fell below its 200-days moving average for the first time since May, which is known as the long-term support base of any asset class.
The tech-heavy Nasdaq Composite finished at 13,092.85, rising 0.2% due to good performance of large-cap technology stocks. The major gainer of the index was Sirius XM Holdings Inc. (SIRI - Free Report) . Shares of the company surged 4.9%. Sirius XM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 1 point to end at 4,274.51. On Sep 26, the broad-market closed below its crucial support base of 4,300 for the first time since Jun 9. Moreover, the index fell below the key support base of 100-day moving average on Sep 21 for the first time since March and continued to trade there. This indicates possibility of more decline for the index.
Six out of11 broad sectors of the benchmark ended in negative territory while five in positive zone. The Utilities Select Sector SPDR (XLU) tumbled 1.9% while the Energy Select Sector SPDR (XLE) climbed 2.5%.
The fear-gauge CBOE Volatility Index (VIX) was down 3.8% to 18.22. A total of 10.9 billion shares were traded on Wednesday, higher than the last 20-session average of 10.2 billion. Decliners and advancers were almost equal on the NYSE. On Nasdaq, a 1.1-to-1 ratio favored advancing issues.
Soaring Government Yields
Following the September post-FOMC statement of the Fed Chairman Jerome Powell, the yield on the short-term 2-Year U.S. Treasury Note reached 5.139%, its highest level since 2006. The yield on the benchmark 10-Year U.S. Treasury Note touched 4.612%, its highest level since 2007. A higher risk-free market interest rate is detrimental to stock investing as it raises the discount rate thereby reducing the net present value of equities.
Spike in Crude Oil Prices
On Sep 27, crude oil prices rose to their highest settlement level year to date. The global benchmark – the Brent crude – rose $0.16 to close at $96.71. The U.S. benchmark – the Western Texas Intermediate crude – increased $0.2 to close at $93.88. Investors remained highly concerned about oil prices as it will increase transportation costs, which in turn will inflate the aggregate price level.
Despite a steady decline since June 2022, the inflation rate still remains well above the Fed’s 2% target level. In his September FOMC post-meeting statement, Powell warned that one more rate hike of 25 basis points by the end of this year. Moreover, he said that the central bank may pursue a higher interest rate regime for longer-than-expected period.
Rise in U.S. Dollar Price Index
On Sep 26, The ICE U.S. Dollar Index (DXY), a measure of the currency against a basket of six others, rose 0.4% to touch 106.71, its highest intraday level since Nov.30, 2022. A higher dollar price will make U.S. exports costly in the international markets.
Economic Data
The Department of Commerce reported that new orders for long-lasting goods unexpected increased 0.2% in August, beating the consensus estimate of a decline of 0.5%. The metric for July was revised downward to a decline of 5.6% from a drop of 5.2% reported earlier. Excluding transportation, orders increased 0.4% but fell 0.7% when excluding defense.
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Stock Market News for Sep 28, 2023
Wall Street closed mixed on Wednesday after a sharp fall on previous day. Market participants remained highly concerned about soaring yields on sovereign bonds, a spike in crude oil prices and increasing U.S. dollar price index. The S&P 500 and the Nasdaq Composite ended in positive territory, while the Dow finished in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.2% to close at 33,550.27. Notably, 28 components of the 30-stock index ended in negative territory, while 2 ended in positive territory. At its intraday high, the blue-chip index was up nearly 113 points. On Sep 26, the index fell below its 200-days moving average for the first time since May, which is known as the long-term support base of any asset class.
The tech-heavy Nasdaq Composite finished at 13,092.85, rising 0.2% due to good performance of large-cap technology stocks. The major gainer of the index was Sirius XM Holdings Inc. (SIRI - Free Report) . Shares of the company surged 4.9%. Sirius XM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 1 point to end at 4,274.51. On Sep 26, the broad-market closed below its crucial support base of 4,300 for the first time since Jun 9. Moreover, the index fell below the key support base of 100-day moving average on Sep 21 for the first time since March and continued to trade there. This indicates possibility of more decline for the index.
Six out of11 broad sectors of the benchmark ended in negative territory while five in positive zone. The Utilities Select Sector SPDR (XLU) tumbled 1.9% while the Energy Select Sector SPDR (XLE) climbed 2.5%.
The fear-gauge CBOE Volatility Index (VIX) was down 3.8% to 18.22. A total of 10.9 billion shares were traded on Wednesday, higher than the last 20-session average of 10.2 billion. Decliners and advancers were almost equal on the NYSE. On Nasdaq, a 1.1-to-1 ratio favored advancing issues.
Soaring Government Yields
Following the September post-FOMC statement of the Fed Chairman Jerome Powell, the yield on the short-term 2-Year U.S. Treasury Note reached 5.139%, its highest level since 2006. The yield on the benchmark 10-Year U.S. Treasury Note touched 4.612%, its highest level since 2007. A higher risk-free market interest rate is detrimental to stock investing as it raises the discount rate thereby reducing the net present value of equities.
Spike in Crude Oil Prices
On Sep 27, crude oil prices rose to their highest settlement level year to date. The global benchmark – the Brent crude – rose $0.16 to close at $96.71. The U.S. benchmark – the Western Texas Intermediate crude – increased $0.2 to close at $93.88. Investors remained highly concerned about oil prices as it will increase transportation costs, which in turn will inflate the aggregate price level.
Despite a steady decline since June 2022, the inflation rate still remains well above the Fed’s 2% target level. In his September FOMC post-meeting statement, Powell warned that one more rate hike of 25 basis points by the end of this year. Moreover, he said that the central bank may pursue a higher interest rate regime for longer-than-expected period.
Rise in U.S. Dollar Price Index
On Sep 26, The ICE U.S. Dollar Index (DXY), a measure of the currency against a basket of six others, rose 0.4% to touch 106.71, its highest intraday level since Nov.30, 2022. A higher dollar price will make U.S. exports costly in the international markets.
Economic Data
The Department of Commerce reported that new orders for long-lasting goods unexpected increased 0.2% in August, beating the consensus estimate of a decline of 0.5%. The metric for July was revised downward to a decline of 5.6% from a drop of 5.2% reported earlier. Excluding transportation, orders increased 0.4% but fell 0.7% when excluding defense.