US stocks decline as more earnings roll in

Dollar gains strength

NEW YORK, Oct 19, (AP): US stocks fell in afternoon trading on Wall Street Wednesday and weighed down major indexes as another batch of companies reported their latest quarterly results.

Several companies including Netflix and United Airlines rose sharply while others, including Abbott Laboratories and M&T Bank, sank.

The S&P 500 fell 0.6% as of 12:09 p.m. Eastern. The Dow Jones Industrial Average fell 70 points, or 0.2%, to 30,454 and the Nasdaq fell 0.7%. Smaller companies fell more than the rest of the market.

Stocks are coming off of two days of gains, but trading remains unsteady overall. Treasury yields rose back near multi-year highs. Crude oil prices rose slightly.

Homebuilders and other companies tied to the industry fell following a disappointing report on the housing industry. Construction on new homes declined more than expected in September. Homebuilder Lennar fell 4.5% and home-improvement retailer Lowe’s shed 4.8%.

The yield on the 10-year Treasury, which influences mortgage rates, rose to 4.12% from 4.02% late Tuesday. The yield on the two-year Treasury, which tends to track expectations for future Federal Reserve action, also rose to 4.55% from 4.43%.

U.S. crude oil prices rose 1.2% and energy stocks made gains. Exxon Mobil rose 2.6%. The White House plans to announce another release of oil from the U.S. strategic reserve.

Corporate earnings

Investors have been focusing on the latest round of corporate earnings this week. The latest results are being closely watched for clues about how companies are dealing with the hottest inflation in four decades and how they intend to operate through the rest of the year and into 2023.

Netflix soared 13.3% after the company said it picked up 2.4 million subscribers during the July-September period, a comeback from a loss of 1.2 million customers during the first half of the year.

United Airlines rose 7.2% after reporting strong thirdquarter financial results. American Airlines will report its results on Thursday.

Household goods giant Procter & Gamble rose 2.2% after also reporting strong financial results. It joined a growing list of companies, including Hasbro and Johnson & Johnson, warning investors about a strong U.S. dollar cutting into revenue. A strong dollar decreases the value of overseas sales after converting the currency. The U.S. currency is now worth more than a euro for the first time in 20 years.

The dollar has gained strength versus currencies worldwide as inflation and recession concerns prompt investors to look for relatively stable investments. Central governments and banks worldwide are dealing with stubbornly hot inflation. British food prices rose at the fastest pace since 1980 last month, driving inflation back to a 40-year high.

Europe

In midday trading, the FTSE in London edged 0.2% lower after a report showed that British inflation surged to a 40year high of 10.1% in September. That increases the likelihood the Bank of England will raise interest rates further and faster.

The DAX in Frankfurt also dipped 0.2%, while the CAC 40 in Paris climbed 0.2%.

Asia

In Asian trading, the Shanghai Composite Index lost 1.2% to 3,044.38 while the Nikkei 225 in Tokyo gained 0.4% to 27,257.38. The Hang Seng in Hong Kong shed 2.4% to 16,511.28.

The Kospi in Seoul declined 0.6% to 2,237.44 and Sydney’s S&P-ASX 200 advanced 0.3% to 6,800.10.

India’s Sensex added 0.2% to 59,093.99. New Zealand and Jakarta advanced while Singapore and Bangkok declined.