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Wall Street ended lower on Wednesday, as investors witnessed stronger-than-expected retail sales data and expect six interest rate cuts in 2024, as well as continue to keenly watch the fourth-quarter 2023 earnings results. All three major stock indexes ended in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.3%, or 94.45 points, to close at 37,266.67. Notably, 19 components of the 30-stock index ended in negative territory, while 10 were in green and one remained unchanged. The major loser of the tech-laden index was Walgreens Boots Alliance, Inc. (WBA - Free Report) . The stock price of the pharmaceutical retailer declined 3.1%. Walgreens Boots Alliance currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite dropped 0.6% to close at 14,855.62.
The S&P 500 slid 0.6% to end at 4,739.21. All 11 broad sectors of the benchmark ended in negative territory. The Real Estate Select Sector SPDR (XLRE), the Utilities Select Sector SPDR (XLU) and the Energy Select Sector SPDR (XLE) declined 1.8%, 1.5% and 0.8%, respectively.
The fear-gauge CBOE Volatility Index (VIX) increased 6.9% to 14.8. A total of 11.8 billion shares were traded on Wednesday, lower than the last 20-session average of 11.9 billion. The S&P 500 posted 24 new 52-week highs and five new lows, and the Nasdaq Composite recorded 47 new highs and 219 new lows.
Robust Retail Sales Dampen Fed Rate Cut Hopes
The retail sales data, for December outperformed expectations, reporting a 0.6% increase, surpassing the consensus estimate of 0.5%. The boost, driven by clothing stores and online store businesses, contributed to a strong end to 2023.
Excluding auto sales, the rise was 0.4%, exceeding the consensus estimate of 0.2%. This encouraging consumer trend holds importance as it comes at a time when the U.S. economy is preparing for a slowdown, which could influence the decisions of the Federal Reserve regarding interest rates. Year over year, retail sales showed a 5.6% increase, outpacing the 3.4% inflation rate.
However, it is important to note that the strength reflected in this report is due to seasonal influences on the data. Investors are monitoring Federal Reserve policies, and the current expectations suggest that there could be six interest rate cuts in 2024.
Mixed Q4 Earnings
Prologis, Inc. (PLD - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of $1.26 per share, in line with the Zacks Consensus Estimate. The real estate developer generated total revenues of $1.76 billion, missing the Zacks Consensus Estimate of $1.78 billion. The stock price of Prologis fell 2.4%
U.S. Bancorp (USB - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of $0.99 per share, in line with the Zacks Consensus Estimate. The bank retailer generated total revenues of $6.76 billion, lagging the Zacks Consensus Estimate of $6.81 billion. The stock price of U.S. Bancorp fell 1.4%.
Progress Software Corporation (PRGS - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of $1.02 per share, beating the Zacks Consensus Estimate of $0.91 per share. The Software company generated total revenues of $177.52 million, outpacing the Zacks Consensus Estimate of $174.1 million. The stock price of Progress Software jumped 5.5%.
Economic Data
Capacity Utilization in December came in at 78.6%, in line with the consensus estimate. The November data was revised marginally downward to 78.6% from 78.8%.
The U.S. Census Bureau reported that Business Inventories for November were revised down to a decrease of 0.1% after a similar drop in October.
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Stock Market News for Jan 18, 2024
Market News
Wall Street ended lower on Wednesday, as investors witnessed stronger-than-expected retail sales data and expect six interest rate cuts in 2024, as well as continue to keenly watch the fourth-quarter 2023 earnings results. All three major stock indexes ended in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.3%, or 94.45 points, to close at 37,266.67. Notably, 19 components of the 30-stock index ended in negative territory, while 10 were in green and one remained unchanged. The major loser of the tech-laden index was Walgreens Boots Alliance, Inc. (WBA - Free Report) . The stock price of the pharmaceutical retailer declined 3.1%. Walgreens Boots Alliance currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite dropped 0.6% to close at 14,855.62.
The S&P 500 slid 0.6% to end at 4,739.21. All 11 broad sectors of the benchmark ended in negative territory. The Real Estate Select Sector SPDR (XLRE), the Utilities Select Sector SPDR (XLU) and the Energy Select Sector SPDR (XLE) declined 1.8%, 1.5% and 0.8%, respectively.
The fear-gauge CBOE Volatility Index (VIX) increased 6.9% to 14.8. A total of 11.8 billion shares were traded on Wednesday, lower than the last 20-session average of 11.9 billion. The S&P 500 posted 24 new 52-week highs and five new lows, and the Nasdaq Composite recorded 47 new highs and 219 new lows.
Robust Retail Sales Dampen Fed Rate Cut Hopes
The retail sales data, for December outperformed expectations, reporting a 0.6% increase, surpassing the consensus estimate of 0.5%. The boost, driven by clothing stores and online store businesses, contributed to a strong end to 2023.
Excluding auto sales, the rise was 0.4%, exceeding the consensus estimate of 0.2%. This encouraging consumer trend holds importance as it comes at a time when the U.S. economy is preparing for a slowdown, which could influence the decisions of the Federal Reserve regarding interest rates. Year over year, retail sales showed a 5.6% increase, outpacing the 3.4% inflation rate.
However, it is important to note that the strength reflected in this report is due to seasonal influences on the data. Investors are monitoring Federal Reserve policies, and the current expectations suggest that there could be six interest rate cuts in 2024.
Mixed Q4 Earnings
Prologis, Inc. (PLD - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of $1.26 per share, in line with the Zacks Consensus Estimate. The real estate developer generated total revenues of $1.76 billion, missing the Zacks Consensus Estimate of $1.78 billion. The stock price of Prologis fell 2.4%
U.S. Bancorp (USB - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of $0.99 per share, in line with the Zacks Consensus Estimate. The bank retailer generated total revenues of $6.76 billion, lagging the Zacks Consensus Estimate of $6.81 billion. The stock price of U.S. Bancorp fell 1.4%.
Progress Software Corporation (PRGS - Free Report) reported fourth-quarter fiscal 2023 adjusted earnings of $1.02 per share, beating the Zacks Consensus Estimate of $0.91 per share. The Software company generated total revenues of $177.52 million, outpacing the Zacks Consensus Estimate of $174.1 million. The stock price of Progress Software jumped 5.5%.
Economic Data
Capacity Utilization in December came in at 78.6%, in line with the consensus estimate. The November data was revised marginally downward to 78.6% from 78.8%.
The U.S. Census Bureau reported that Business Inventories for November were revised down to a decrease of 0.1% after a similar drop in October.