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U.S. stock markets ended lower on Monday after witnessing choppy trading as technology stocks dragged all three major stock indexes into the red. Moreover, lingering trade conflicts with China and surging bond yields, made investors skeptical about investing in equities. Further, lower-than-expected retail sales data also dented investors’ confidence.
The Dow Jones Industrial Average (DJI) closed at 25,250.55, shedding 0.4%. The S&P 500 Index (INX) decreased 0.6% to close at 2,750.79. The Nasdaq Composite Index (IXIC) closed at 7,430.74, declining 0.9%. A total of 6.91 billion shares were traded on Monday, lower than the last 20-session average of 7.82 billion shares. Advancers outnumbered decliners on the NYSE by 1.39-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.15-to-1 ratio. The CBOE VIX decreased 0.05% to close at 21.30.
How Did the Benchmarks Perform?
The Dow ended in negative territory reversing Friday’s gain. The blue-chip index witnessed choppy trading gaining 142.43 points at one time and losing 96.11 points at another time. Meanwhile, 20 components of the 30-stock index finished in the red while ten ended in the green.
The S&P 500 closed in the red led by a fall of 1.6% in the Technology Select Sector SPDR (XLK). Notably, seven out of 11 sectors of the benchmark index ended in the red while four closed in the green. Meanwhile, the tech-laden Nasdaq Composite also finished in the red due to poor showing by FAANG stocks.
Technology Sector Pull Down Wall Street
Large-cap technology stocks suffered most on Monday. This sector was the best performer in the first three quarters of 2018. However, tech stocks were major sufferers in last week’s stock market rout when yields on several government bonds reached all-time highs.
Although, the yields of 10-year and 30-year U.S. Treasury Notes have declined from that level, they are still hovering above the psychological barrier of 3%, indicating impending inflation and further rate hikes by the Fed. Investors remain concerned that higher rates will raise borrowing costs of companies, dragging down their profit margins. Moreover, lingering trade-related conflicts with China is likely to systematically close the Chinese market to U.S. companies offering high-tech and Internet-based products.
On Oct 15, the Department of Commerce reported that the U.S. retail sales for the month of September edged up 0.1%, in keeping with August’s increase. However, September’s reading was significantly below the consensus estimate of a gain of 0.6%, which led to speculation that economic growth had slowed down toward the end of the third quarter. Year over year, retail sales grew 4.7% in September.
Sales of restaurants and bars, grocery stores and gas stations suffered the most. Restaurants and bars suffered 1.8% decline in sales, its worst performance in nearly two years. However, auto sales rebounded 0.8% after declining 0.5% in August. Likewise, sales at clothing stores surged 0.5% after plummeting 2.8% in the previous month.
The New York Fed reported that the Empire State manufacturing index rose 2.1% to 21.1 in October surpassing September’s reading of 19. Notably, any reading above zero indicates improvement in manufacturing sector.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Stock Market News For Oct 16, 2018
U.S. stock markets ended lower on Monday after witnessing choppy trading as technology stocks dragged all three major stock indexes into the red. Moreover, lingering trade conflicts with China and surging bond yields, made investors skeptical about investing in equities. Further, lower-than-expected retail sales data also dented investors’ confidence.
The Dow Jones Industrial Average (DJI) closed at 25,250.55, shedding 0.4%. The S&P 500 Index (INX) decreased 0.6% to close at 2,750.79. The Nasdaq Composite Index (IXIC) closed at 7,430.74, declining 0.9%. A total of 6.91 billion shares were traded on Monday, lower than the last 20-session average of 7.82 billion shares. Advancers outnumbered decliners on the NYSE by 1.39-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.15-to-1 ratio. The CBOE VIX decreased 0.05% to close at 21.30.
How Did the Benchmarks Perform?
The Dow ended in negative territory reversing Friday’s gain. The blue-chip index witnessed choppy trading gaining 142.43 points at one time and losing 96.11 points at another time. Meanwhile, 20 components of the 30-stock index finished in the red while ten ended in the green.
The S&P 500 closed in the red led by a fall of 1.6% in the Technology Select Sector SPDR (XLK). Notably, seven out of 11 sectors of the benchmark index ended in the red while four closed in the green. Meanwhile, the tech-laden Nasdaq Composite also finished in the red due to poor showing by FAANG stocks.
Technology Sector Pull Down Wall Street
Large-cap technology stocks suffered most on Monday. This sector was the best performer in the first three quarters of 2018. However, tech stocks were major sufferers in last week’s stock market rout when yields on several government bonds reached all-time highs.
Although, the yields of 10-year and 30-year U.S. Treasury Notes have declined from that level, they are still hovering above the psychological barrier of 3%, indicating impending inflation and further rate hikes by the Fed. Investors remain concerned that higher rates will raise borrowing costs of companies, dragging down their profit margins. Moreover, lingering trade-related conflicts with China is likely to systematically close the Chinese market to U.S. companies offering high-tech and Internet-based products.
Consequently, shares of Apple Inc. (AAPL - Free Report) , Alphabet Inc. (GOOGL - Free Report) , Amazon.com Inc. (AMZN - Free Report) , Netflix Inc. (NFLX - Free Report) and Microsoft Corp. (MSFT - Free Report) tumbled 2.1%, 1.6%, 1.6%, 1.9% and 1.8%, respectively. Apple, Amazon and Microsoft carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
On Oct 15, the Department of Commerce reported that the U.S. retail sales for the month of September edged up 0.1%, in keeping with August’s increase. However, September’s reading was significantly below the consensus estimate of a gain of 0.6%, which led to speculation that economic growth had slowed down toward the end of the third quarter. Year over year, retail sales grew 4.7% in September.
Sales of restaurants and bars, grocery stores and gas stations suffered the most. Restaurants and bars suffered 1.8% decline in sales, its worst performance in nearly two years. However, auto sales rebounded 0.8% after declining 0.5% in August. Likewise, sales at clothing stores surged 0.5% after plummeting 2.8% in the previous month.
The New York Fed reported that the Empire State manufacturing index rose 2.1% to 21.1 in October surpassing September’s reading of 19. Notably, any reading above zero indicates improvement in manufacturing sector.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>