Equities wobble as indexes hover around record highs
NEW YORK, Oct 21, (AP): Stocks wobbled on Wall Street Thursday, a day after approaching record highs set this summer.
The S&P 500 index fell 0.2% as of 11:35 a.m. Eastern. The benchmark index is sitting just below the all-time high it reached on Sept. 2. The Dow Jones Industrial Average fell 156 points, or 0.4%, to 35,449 and is just below its all-time high set on Aug. 16.
The Nasdaq rose 0.1% and smaller stocks edged higher. The Russell 2000 rose les than 0.1%.
U.S. crude oil prices fell 2.4% and weighed down energy stocks. Devon Energy fell 3.4% and Schlumberger fell 2%. Banks also broadly fell. Capital One shed 3.6%.
A mix of companies that rely on direct consumer spending made gains. Tesla rose 2.9% after reporting encouraging third-quarter profits, despite parts shortages and shipping delays.
WeWork rose 10.6% in its second attempt to become a publicly traded company. The company, which provides shared workspaces, had a spectacular collapse during its first attempt to do so two years ago and is emerging after the pandemic closed millions of square feet of office space.
Rising
Investors are reviewing the latest earnings reports with supply chain problems and the impact from rising inflation as a key focus. Many companies have warned that the supply chain issues and overall higher costs will hurt operations and Wall Street is trying to gauge just how much it will sting corporate profit growth and margins.
Companies seem to be managing those higher costs and encouraging investors who had been uncertain in a very choppy market for weeks, said Sam Stovall, chief investment strategist at CFRA.
“Investors were willing to rotate rather than retreat while they waited for better news to take bigger and longerterm positions,” he said.
Wall Street is also concerned that rising inflation will eventually force more companies to raise prices on goods, which could result in lower consumer
spending and a stalled economic recovery.
Several carmakers and automotive products companies are making gains following Tesla’s latest earnings. Ford rose 1.3% and AutoZone rose 2.1%.
IBM slumped 7.7% after reporting quarterly revenue that fell shy of analysts’ forecasts.
Bond yields moved higher. The yield on the 10-year Treasury rose to 1.67% from 1.63% late Wednesday.
European markets were lower and Asian markets ended mixed.
Outside of earnings, investors received an encouraging update on the labor market. The Labor Department reported that the number of Americans applying for unemployment benefits fell last week to a new low point since the pandemic erupted.
Global shares were mostly lower Thursday, after major Chinese property developer Evergrande said a plan to sell its property management arm to a
smaller rival had fallen through.
France’s CAC 40 shed 0.4% in early trading to 6,679.78, while Germany’s DAX fell 0.2% to 15,498.69. Britain’s FTSE 100 dipped 0.4% to 7,198.09. U.S. shares were set to drift lower with Dow futures down 0.3% at 35,375.00. S&P 500 futures slipped 0.3% to 4,516.75.
China Evergrande Group’s shares tumbled 12.5% while shares in Evergrande Property Services slipped 8%. In a notice to the Hong Kong exchange Evergrande said it was having difficulties selling off assets to resolve its cash crunch.
Hopson Development Holdings’ shares rose 12.4% after it said was unable to complete the purchase. Trading of shares in all three companies was suspended pending a resolution of the transaction.
Hong Kong’s Hang Seng index lost 0.5% to 26,017.53, while the Shanghai Composite index gained 0.2% to
3,594.78.
Some “verbal assurances by government officials and loosening of home loans for some of its major banks suggest that the authorities are monitoring the property market risks, hoping to reassure markets of the knock-on impact on the economy,” said Yeap Jun Rong, a market strategist at IG in Singapore.
Japan’s benchmark Nikkei 225 slipped 1.9% to finish at 28,708.58, as the world’s third largest economy headed into nationwide elections to select a new prime minister.
The candidate from Japan’s ruling party, Prime Minister Fumio Kishida, has given mixed messages about his policies, and his “new capitalism” measures, which include promises to reduce income disparities. That has done little to reassure markets so far.
Australia’s S&P/ASX 200 was little changed, inching up less than 0.1% to 7,415.40. South Korea’s Kospi fell 0.2% to 3,007.33.