As investors evaluated the most recent round of quarterly company reports and expectations, Treasury yields increased once more, and U.S. stocks finished substantially lower on Wednesday, with the S&P 500 and Nasdaq losing more than 1% each. Risk aversion was fueled by rising Middle East tensions. Gold as a safe haven reached its highest point …
As investors evaluated the most recent round of quarterly company reports and expectations, Treasury yields increased once more, and U.S. stocks finished substantially lower on Wednesday, with the S&P 500 and Nasdaq losing more than 1% each. Risk aversion was fueled by rising Middle East tensions. Gold as a safe haven reached its highest point in over two months. The fear meter used on Wall Street, the Cboe Volatility index, increased. As evidence that the Federal Reserve will maintain higher interest rates for a longer period of time, statistics showing a resurgence in single-family homebuilding in the United States in September led to a little increase in yields. “We’re in a period of sector rotation, and people are trying to figure out in this new environment – in a full reset of rates across the curve – what are the stocks that are going to continue to do well and what are the stocks that are going to suffer,” said Rick Meckler, partner at Cherry Lane Investments, an office for family investments in New Vernon, New Jersey.
“Obviously, companies that are highly leveraged have difficulties in this kind of a market.”bStocks become less appealing as risk-free U.S. Treasury bonds offer higher yields. In terms of results, shares of Procter & Gamble (NYSE:PG) rose 2.6% after its quarterly sales beat market forecasts, while shares of United Airlines Holdings (NASDAQ: UAL) fell 9.7% after the company predicted a worse fourth-quarter profit owing to rising costs. The passenger airlines index for the S&P 500 fell 5.6%. The S&P 500 lost 58.6 points, or 1.34%, to 4,314.6, while the Dow Jones Industrial Average lost 219.45 points, or 1.62%, to 13,314.30. The Nasdaq Composite also experienced a decline of 219.45 points, or 1.62%. Investors are concerned about the effects of the Israel-Hamas conflict, which started on October 7 with a Hamas attack on soldiers and civilians in Israel. During a brief stop in Israel on Wednesday, Vice President Joe Biden expressed support for Israel and claimed the militants’ rocket appeared to have been misfired, leading to a tragic explosion at a Gaza hospital.
The third-quarter profit of Morgan Stanley was negatively impacted by sluggish deal making, according to other earnings news. Shares dropped 6.8% at day’s end. Following the release of their respective quarterly reports, Tesla (NASDAQ: TSLA) and Netflix (NASDAQ: NFLX) saw their shares rise by around 2% and 12%, respectively, after the closing bell. Netflix and Tesla both finished the regular session with losses of 2.7% and 4.8%, respectively. As the third-quarter earnings season in the United States gets underway, more reports are anticipated in the upcoming days. 10.48 billion shares were traded on U.S. exchanges, exceeding the 10.45 billion average for the entire session for the previous 20 trading days. Declining issues outnumbered rising ones on the NYSE by a 4.67-to-1 ratio; on Nasdaq, a 3.33-to-1 ratio favored decliners. The Nasdaq Composite registered 25 new highs and 252 new lows, while the S&P 500 set 12 new 52-week highs and 25 new lows.
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