We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Wall Street closed sharply lower on Thursday, pulled down by tech and related stocks. Disappointing numbers coming in from big-tech earnings weighed on the market. All of the three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.8% or 251.63 points to close at 32,784.3. Twenty-two components of the 30-stock index ended in negative territory, while eight ended in positive.
The tech-heavy Nasdaq Composite plunged 225.62 points or 1.8% to close at 12,595.61.
The S&P 500 fell 49.54 points, or 1.2%, to close at 4,137.23, notching its sixth decline in seven sessions. Eight out of the 11 broad sectors of the benchmark index closed in the red. The Communication Services Select Sector SPDR (XLC), the Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select Sector SPDR (XLY) slid 2.2%, 1.9% and 1.6%, respectively, while the Real Estate Select Sector SPDR (XLRE) advanced 2.1%.
The fear-gauge CBOE Volatility Index (VIX) increased 2.4% to 20.68. A total of 11.6 billion shares were traded on Thursday, higher than the last 20-session average of 10.7 billion. Decliners outnumbered advancers on the NYSE by a 1.02-to-1 ratio. On the Nasdaq, declining issues led advancers by 1.14-to-1.
“Magnificent Seven” Weigh on the Market
The quarterly earnings numbers coming in from the “Magnificent Seven” tech behemoths have not been too disappointing. However, the guidance for growth from these companies does not paint a rosy picture. Most of these companies suggest a flattish growth as we move into the next quarter.
Alphabet Inc. (GOOGL - Free Report) , Amazon.com, Inc. (AMZN - Free Report) , Apple Inc. (AAPL - Free Report) , Meta Platforms, Inc. (META - Free Report) , Microsoft Corporation (MSFT - Free Report) , Tesla, Inc. (TSLA - Free Report) and NVIDIA Corporation (NVDA - Free Report) have driven tech-growth throughout the year, but may not be in the best position to drive the boom into the next year. Since July, these stocks have been down on an average of 11%. As a result, the S&P 500 has also come down 10% from its July peak.
It is increasingly becoming clear that investors are betting on the economy to slow down because of sustained high levels of interest rates. The regular release of sectoral data reflecting a resilient economy is also not helping. The Magnificent Seven are finding it hard to drive the tech sector with them. Over the past two sessions, the tech-heavy Nasdaq has shed close to 5.5% of its worth. The tech behemoths are, in apprehension of the economy slowing down, leading the rout.
The Labor Department said on Thursday that initial jobless claims rose to 210,000, increasing 10,000 for the week ending Oct 21. The previous week's level was revised up by 2,000 from 198,000 to 200,000. The four-week moving average increased to 207,500, marking a rise of 1,250 from the previous week. The prior week's average was revised up by 500 to 206,250.
Continuing claims came in at 1,790,000 for the week ending Oct 14, increasing 63,000 from the previous week’s revised level. The prior week's numbers were revised down by 7,000 from 1,734,000 to 1,727,000. The four-week moving average was 1,723,500, an increase of 31,250 from the previous week's revised average. Last week's average was revised down by 1,750 from 1,694,000 to 1,692,250.
Per the U.S. Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 4.9% in the third quarter of 2023, according to the “advance” estimate. In the second quarter, real GDP increased 2.1%.
The National Association of Realtors reported that pending home sales for September increased 1.1%. In August, it had gone down 7.1%.
The U.S. Census Bureau reported that durable goods orders for September increased 4.7%. The August number has been revised to a decrease of 0.1% from the earlier reported 0.2% growth.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Stock Market News for Oct 27, 2023
Wall Street closed sharply lower on Thursday, pulled down by tech and related stocks. Disappointing numbers coming in from big-tech earnings weighed on the market. All of the three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.8% or 251.63 points to close at 32,784.3. Twenty-two components of the 30-stock index ended in negative territory, while eight ended in positive.
The tech-heavy Nasdaq Composite plunged 225.62 points or 1.8% to close at 12,595.61.
The S&P 500 fell 49.54 points, or 1.2%, to close at 4,137.23, notching its sixth decline in seven sessions. Eight out of the 11 broad sectors of the benchmark index closed in the red. The Communication Services Select Sector SPDR (XLC), the Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select Sector SPDR (XLY) slid 2.2%, 1.9% and 1.6%, respectively, while the Real Estate Select Sector SPDR (XLRE) advanced 2.1%.
The fear-gauge CBOE Volatility Index (VIX) increased 2.4% to 20.68. A total of 11.6 billion shares were traded on Thursday, higher than the last 20-session average of 10.7 billion. Decliners outnumbered advancers on the NYSE by a 1.02-to-1 ratio. On the Nasdaq, declining issues led advancers by 1.14-to-1.
“Magnificent Seven” Weigh on the Market
The quarterly earnings numbers coming in from the “Magnificent Seven” tech behemoths have not been too disappointing. However, the guidance for growth from these companies does not paint a rosy picture. Most of these companies suggest a flattish growth as we move into the next quarter.
Alphabet Inc. (GOOGL - Free Report) , Amazon.com, Inc. (AMZN - Free Report) , Apple Inc. (AAPL - Free Report) , Meta Platforms, Inc. (META - Free Report) , Microsoft Corporation (MSFT - Free Report) , Tesla, Inc. (TSLA - Free Report) and NVIDIA Corporation (NVDA - Free Report) have driven tech-growth throughout the year, but may not be in the best position to drive the boom into the next year. Since July, these stocks have been down on an average of 11%. As a result, the S&P 500 has also come down 10% from its July peak.
It is increasingly becoming clear that investors are betting on the economy to slow down because of sustained high levels of interest rates. The regular release of sectoral data reflecting a resilient economy is also not helping. The Magnificent Seven are finding it hard to drive the tech sector with them. Over the past two sessions, the tech-heavy Nasdaq has shed close to 5.5% of its worth. The tech behemoths are, in apprehension of the economy slowing down, leading the rout.
Consequently, shares of NVIDIA and Apple fell 3.5% and 2.5%, respectively. NVIDIA carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Economic Data
The Labor Department said on Thursday that initial jobless claims rose to 210,000, increasing 10,000 for the week ending Oct 21. The previous week's level was revised up by 2,000 from 198,000 to 200,000. The four-week moving average increased to 207,500, marking a rise of 1,250 from the previous week. The prior week's average was revised up by 500 to 206,250.
Continuing claims came in at 1,790,000 for the week ending Oct 14, increasing 63,000 from the previous week’s revised level. The prior week's numbers were revised down by 7,000 from 1,734,000 to 1,727,000. The four-week moving average was 1,723,500, an increase of 31,250 from the previous week's revised average. Last week's average was revised down by 1,750 from 1,694,000 to 1,692,250.
Per the U.S. Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 4.9% in the third quarter of 2023, according to the “advance” estimate. In the second quarter, real GDP increased 2.1%.
The National Association of Realtors reported that pending home sales for September increased 1.1%. In August, it had gone down 7.1%.
The U.S. Census Bureau reported that durable goods orders for September increased 4.7%. The August number has been revised to a decrease of 0.1% from the earlier reported 0.2% growth.