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Wall Street closed sharply lower on Wednesday, dragged down by a broadbased slump. The market corrected itself from the rate cut rally, which has continued to drive business over the past two months. All of the three major stock indexes ended firmly in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) dipped 475.92 points, or 1.3%, to close at 37,082. All of the components of the 30-stock index ended in negative territory.
The tech-heavy Nasdaq Composite lost 1.5%, or 225.28 points, to close at 14,777.94.
The S&P 500 slid 1.5%, or 70.02 points, to close at 4,698.35. All of the 11 broad sectors of the benchmark index closed in the red. The Utilities Select Sector SPDR (XLU), the Consumer Staples Select Sector SPDR (XLP) and the Consumer Discretionary Select Sector SPDR (XLY) declined 2%, 1.9% and 1.8%, respectively.
The fear-gauge CBOE Volatility Index (VIX) increased 9.1% to 13.67. A total of 12.8 billion shares were traded on Wednesday, higher than the last 20-session average of 12.2 billion. Decliners outnumbered advancers on the NYSE by a 2.64-to-1 ratio. On the Nasdaq, declining issues led to advancing ones by 2.26-to-1.
Market Corrects Itself From its Overbought Position
Over the past few weeks, Wall Street has boomed over Fed rate-cut expectations. According to CME’s FedWatch tool, market participants are not only banking on rate hikes having come to an end, but are also predicting a 71.1% likelihood that the central bank will start cutting rates as early as March next year.
However, Wednesday oversaw an end to a nine-day winning streak as the market corrected itself from its overbought position and took out some profits. Every major sector took a hit. Consequently, shares of Advanced Micro Devices, Inc. (AMD - Free Report) and Warner Bros. Discovery, Inc. (WBD - Free Report) fell 3.3% and 5.7%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
FedEx Weighs on the S&P 500
FedEx Corporation (FDX - Free Report) reported second-quarter fiscal 2024 earnings of $3.99 per share, missing the Zacks Consensus Estimate of $4.14. Revenues of $22,165 million fell short of the Zacks Consensus Estimate of $22,328.9 million and decreased 3% from the year-ago fiscal quarter’s reported figure. As a result, its shares shed 12.1%, and the marquee stock became the biggest laggard on the S&P 500.
The package delivery behemoth also missed its quarterly profit estimates. It cut its full-year revenue forecast in what is turning out to be a pretty grim time for the sector in a weak holiday season.
Economic Data
The National Association of Realtors reported that existing home sales edged higher by 0.8% in November to a seasonally adjusted annual rate of 3.82 million, snapping a five-month drop. The number for October remained unrevised at 3.79 million units sold.
The Conference Board reported that the consumer confidence index increased in December to 110.7, up from a downwardly revised 101.0 in November. The November index was previously reported to be at 102.0.
Per a government report, for the week ending Dec 15, 2023, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.9 million barrels from the previous week. In the prior week, inventories had gone down by 4.3 million barrels.
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Stock Market News for Dec 21, 2023
Wall Street closed sharply lower on Wednesday, dragged down by a broadbased slump. The market corrected itself from the rate cut rally, which has continued to drive business over the past two months. All of the three major stock indexes ended firmly in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) dipped 475.92 points, or 1.3%, to close at 37,082. All of the components of the 30-stock index ended in negative territory.
The tech-heavy Nasdaq Composite lost 1.5%, or 225.28 points, to close at 14,777.94.
The S&P 500 slid 1.5%, or 70.02 points, to close at 4,698.35. All of the 11 broad sectors of the benchmark index closed in the red. The Utilities Select Sector SPDR (XLU), the Consumer Staples Select Sector SPDR (XLP) and the Consumer Discretionary Select Sector SPDR (XLY) declined 2%, 1.9% and 1.8%, respectively.
The fear-gauge CBOE Volatility Index (VIX) increased 9.1% to 13.67. A total of 12.8 billion shares were traded on Wednesday, higher than the last 20-session average of 12.2 billion. Decliners outnumbered advancers on the NYSE by a 2.64-to-1 ratio. On the Nasdaq, declining issues led to advancing ones by 2.26-to-1.
Market Corrects Itself From its Overbought Position
Over the past few weeks, Wall Street has boomed over Fed rate-cut expectations. According to CME’s FedWatch tool, market participants are not only banking on rate hikes having come to an end, but are also predicting a 71.1% likelihood that the central bank will start cutting rates as early as March next year.
However, Wednesday oversaw an end to a nine-day winning streak as the market corrected itself from its overbought position and took out some profits. Every major sector took a hit. Consequently, shares of Advanced Micro Devices, Inc. (AMD - Free Report) and Warner Bros. Discovery, Inc. (WBD - Free Report) fell 3.3% and 5.7%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
FedEx Weighs on the S&P 500
FedEx Corporation (FDX - Free Report) reported second-quarter fiscal 2024 earnings of $3.99 per share, missing the Zacks Consensus Estimate of $4.14. Revenues of $22,165 million fell short of the Zacks Consensus Estimate of $22,328.9 million and decreased 3% from the year-ago fiscal quarter’s reported figure. As a result, its shares shed 12.1%, and the marquee stock became the biggest laggard on the S&P 500.
The package delivery behemoth also missed its quarterly profit estimates. It cut its full-year revenue forecast in what is turning out to be a pretty grim time for the sector in a weak holiday season.
Economic Data
The National Association of Realtors reported that existing home sales edged higher by 0.8% in November to a seasonally adjusted annual rate of 3.82 million, snapping a five-month drop. The number for October remained unrevised at 3.79 million units sold.
The Conference Board reported that the consumer confidence index increased in December to 110.7, up from a downwardly revised 101.0 in November. The November index was previously reported to be at 102.0.
Per a government report, for the week ending Dec 15, 2023, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.9 million barrels from the previous week. In the prior week, inventories had gone down by 4.3 million barrels.