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Stock Market News for Nov 15, 2022

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U.S. stocks closed lower on Monday after two straight sessions of gains. Investors traded cautiously as comments made by multiple Fed officials about rate hikes sent mixed signals. The news of a possible Amazon layoff plan weighed down on the market. All three major indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.6% or 211.16 points to end at 33,536.7 points. Seventeen components of the 30-stock index ended in the negative territory, while 13 ended in the positive.

The S&P 500 lost 0.9% or 35.68 points to close at 3,957.25 points. Ten of the 11 broad sectors of the benchmark index ended in negative territory. The Real Estate Select Sector SPDR (XLRE), the Consumer Discretionary Select Sector SPDR (XLY) and the Financials Select Sector SPDR (XLF) fell 2.7%, 1.6% and 1.4%, respectively, while the Health Care Select Sector SPDR (XLV) gained 0.1%.

The tech-heavy Nasdaq declined 1.1% or 127.11 points to finish at 11,196.22 points.

The fear-gauge CBOE Volatility Index (VIX) increased 5.4% to 23.73. A total of 11.5 billion shares were traded on Monday, lower than the last 20-session average of 12.1 billion. Decliners outnumbered advancers on the NYSE by a 2.23-to-1 ratio. On Nasdaq, a 1.61-to-1 ratio favored the decliners.

Fed Officials Send Mixed Signal

Fed Governor Christoph Waller said on Sunday that the central bank may be considering slowing the pace of rate increases at its December meeting, but that should not be seen as a "softening" in its commitment to lower inflation. “Quit paying attention to the pace and start paying attention to where the endpoint is going to be. Until we get inflation down, that endpoint is still a ways out there," he said. This is in sync with a cautious line taken by Jerome Powell when he commented on the state of the economy after the November meeting. In essence, these officials have been warning market participants against pricing in Fed’s loosening of policy, and that even though the Fed might not be increasing rates after a point, they will not be bringing them down anytime soon. Stock prices had reacted negatively early on Monday, weighing in these comments.

However, as the day progressed, more positive comments came in from Fed vice-chair Lael Brainard as she went on record saying, "I think it will probably be appropriate soon to move to a slower pace of increases, but I think what’s really important to emphasize is... we have additional work to do," in an interview given at Washington.

The volatility of the economy is pushing investors to interpret these comments as dovish or hawkish, depending on who is making them. Brainard has a reputation of being dovish, and market participants took comfort from her comments. Trading rebounded a bit after her comments came in. Generally, investors are looking forward to further inflation data coming in this week to gauge the direction that the Fed will be taking. Mixed signals coming in from various officials are troubling the market.

Amazon’s Layoff Plan Impacts Stocks

Before Brainard’s comments, stocks slumped as reports emerged that Amazon.com, Inc. (AMZN - Free Report) is planning to lay off 10,000 employees, a number representing about 3% of its corporate staff, in its biggest staff reduction to date. It is being contemplated that these actions are a direct fallout of the uncertain macroeconomic environment faced by the company and the tech sector at large as recession looms on the economy.

This news follows similar layoff plans made by other tech giants in recent days, and pushed the Technology Select Sector SPDR (XLK) down 0.9% for the day. Stocks of Amazon fell 2.3%.

Consequently, shares of Okta, Inc. (OKTA - Free Report) and Zscaler, Inc. (ZS - Free Report) slid 5.4% and 3.8%, respectively. Zscaler has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

No economic data was released on Monday.


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