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Stock Market News for Nov 10, 2023

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U.S. stocks closed lower on Thursday as bond yields climbed after a disappointing Treasury debt auction while Federal Reserve Chair Jerome Powell said that more interest rate hikes could be required to bring down inflation. All three major indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) declined 0.7% or 220.33 points to close at 33,891.94 points after hitting its session low of 33,859.77 earlier in the day.

The S&P 500 slid 0.8% or 35.43 points, to end at 4,347.35 points, snapping its eight-day winning streak. Healthcare and consumer discretionary stocks were the biggest gainers.

The Health Care Select Sector SPDR (XLV) lost 2.1%, while the Consumer Discretionary Select Sector SPDR (XLY) fell 1.9%. The Technology Select Sector SPDR (XLK) declined 0.5%. All 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq fell 0.9% or 128.97 points to finish at 13,521.45 points, ending its ninth straight day of gains.

The fear-gauge CBOE Volatility Index (VIX) was up 5.81% to 15.29. A total of 11.36 billion shares were traded on Thursday, higher than the last 20-session average of 10.97 billion. Decliners outnumbered advancers on the NYSE by a 2.7-to-1 ratio. On the Nasdaq, a 2.8-to-1 ratio favored declining issues.

Powell’s Comments Dent Investors’ Sentiment

Stocks took a hit on Thursday, with both the S&P 500 and Nasdaq, snapping their longest winning streaks in two years, following a disappointing $24 billion sale of 30-year Treasury bonds.

Stocks traded higher initially in the day but investors’ confidence was dented following Powell’s speech at the International Monetary Fund. The Fed Chair maintained his hawkish stance and hinted at more interest rate hikes to bring down inflation to the central bank’s target of 2%.

“The Federal Open Market Committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance,” Powell said in his speech.

Following this, stocks took a hit only to finish near their session lows.

Bond Yields Rise

Powell’s speech came just after the weak auction of the 30-year Treasury yields, which didn’t help the situation. The 30-year Treasury yield rose 11 basis points to end at 4.772%, while the benchmark 10-year Treasury yield jumped 12 basis points to finish at 4,634% on Thursday.

Discretionary stocks were one of the worst performers. Shares of Royal Caribbean Cruises Ltd. ((RCL - Free Report) ) fell 3%, while Norwegian Cruise Line Holdings Ltd. ((NCLH - Free Report) ) tumbled 5.1%. Royal Caribbean Cruises has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Investors also closely watch earnings reports from a spate of companies. Shares of MGM Resorts International ((MGM - Free Report) ) declined 1.1% despite the company beating on earnings. MGM Resorts reported third-quarter 2023 earnings of $0.64 per share, outpacing the Zacks Consensus Estimate of $0.55 per share.

Economic Data

In economic data released on Thursday, the Labor Department said that jobless claims totaled 217,000 for the week ending Nov 4, a decrease from the previous week’s revised level of 220,000 from 217,000. The four-week moving average was 212,250, an increase of 1,500 from the previous week’s revised average of 210,750.

Continuing claims came in at 1,834,000, an increase of 22,000 from the previous week’s revised level of 1,812,000. The 4-week moving average was 1,789,000 an increase of 32,250 from the previous week's revised average of 1,756,750.

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