NEW YORK: US stocks wavered to a mixed close on Monday (Oct 23) as benchmark US Treasury yields backed down from 5% and investors shifted their focus to this week’s high profile earnings and closely watched economic data.
The Dow Jones Industrial Average fell 190.87 points, or 0.58%, to 32,936.41; the S&P 500 lost 7.12 points, or 0.17%, at 4,217.04; and the Nasdaq Composite added 34.52 points, or 0.27%, at 13,018.33.
The S&P 500 ended below its 200-day moving average, a closely watched technical level, for the second straight session.
“The story continues to be about interest rates, and to some extent switching from ‘higher for longer’ to ‘how much higher for how much longer?’” said Oliver Pursche, senior vice president at Wealthspire Advisors in New York. “The market has accepted the idea that the Fed is not going to lower rates any time soon.”
The week ahead promises to be eventful for earnings, with reports by nearly one-third of the companies in the S&P 500.
These include megacap momentum drivers, including Microsoft Corp, Alphabet Inc, Meta Platforms Inc and Amazon.com, along with heavy-hitting industrials such as General Motors Co, Ford Motor Co and Boeing Co.
“With nearly a third of the S&P reporting this week, investors are hoping these ‘magnificent seven’ companies will end up surprising to the upside,” said Sam Stovall, chief investment strategist of CFRA Research in New York.
So far, 86 of the companies in the S&P 500 have posted earnings. Of those, 78% have beat expectations, LSEG data showed.
Analysts see aggregate S&P 500 earnings for the July-September period growing 1.2% year-on-year, slightly below the 1.6% growth projected at the start of the month, according to LSEG.
The Commerce Department on Thursday will announce third-quarter gross domestic product, seen accelerating to 4.3%. Its wide-ranging Personal Consumption Expenditures (PCE) report, due on Friday, is expected to show annual headline and core inflation cooling down to 3.4% and 3.7%, respectively.
“The Fed wants to slow inflation at a quicker pace than it slows economic growth, and it’s doing so,“ Pursche added. “That’s the classic definition of a soft landing.”
Geopolitical turmoil is also on the radar, with market participants looking for potential signs the Israel-Hamas conflict could broaden or escalate.
Walgreens Boots Alliance surged 3.3% after JPMorgan upgraded the pharmacy chain operator to “overweight” from “neutral”.
Chevron fell 3.7% after the company said it would buy smaller rival Hess Corp in a US$53 billion (RM253.7 billion) all-stock deal. Hess dipped 1.1%. – Reuters