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Wall Street closed sharply lower on Monday amid rising geopolitical tensions. Strong numbers from the retail sector failed to uplift investor mood as treasury yields shot up. All of the three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 248.13 points, or 0.7%, to close at 37,735.11. Twenty components of the 30-stock index ended in negative territory, while 10 ended in positive.
The tech-heavy Nasdaq Composite lost 290.07 points, or 1.8%, to close at 15,885.02.
The S&P 500 declined 61.59 points, or 1.2%, to close at 5,061.82. All of the 11 broad sectors of the benchmark index closed in the red. The Technology Select Sector SPDR (XLK), the Real Estate Select Sector SPDR (XLRE) and the Consumer Discretionary Select Sector SPDR (XLY) slid 1.9%, 1.8% and 1.7%, respectively.
The fear-gauge CBOE Volatility Index (VIX) increased 11.1% to 19.23. A total of 11.5 billion shares were traded on Monday, higher than the last 20-session average of 11 billion. Decliners outnumbered advancers by a 5.1-to-1 ratio on the NYSE. On the Nasdaq, declining issues outnumbered advancing ones by a 3.5-to-1 ratio.
Geopolitical Tensions Weigh on the Markets
Iran’s retaliatory attack on Israel dominated the stock movement in Wall Street on Monday. The very idea that the situation can escalate into a full-blown war has dampened investor mood, because that might push the economy back into an inflation cycle.
If prices continue to rise, the Fed might consider tightening monetary policy all over again. At the very least, rate cuts would be further delayed. Market participants are, hence, keenly awaiting de-escalation. The effect of an anticipated war in the Middle East is already being felt in the markets. Mega-cap growth stocks have suffered because price pressures today would make them appear overvalued with respect to future prospects.
Treasury yields have started climbing up again, with talks of an economic slowdown going around. The U.S. 10-year treasury yield shot up by more than 11 basis points to 4.612%. The benchmark yield at one point hit its highest level since mid-November. The 2-year Treasury yield added more than 3 basis points, ending at 4.912%.
The U.S. Census Bureau announced that retail sales for March had increased 0.7% against a consensus of 0.3% rise for the period. The number for February, which was previously reported as a 0.6% increase, was revised up to 0.9%.
The Bureau also reported that business inventories had increased 0.4% in February. They were virtually unchanged in the month prior.
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Stock Market News for Apr 16, 2024
Wall Street closed sharply lower on Monday amid rising geopolitical tensions. Strong numbers from the retail sector failed to uplift investor mood as treasury yields shot up. All of the three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 248.13 points, or 0.7%, to close at 37,735.11. Twenty components of the 30-stock index ended in negative territory, while 10 ended in positive.
The tech-heavy Nasdaq Composite lost 290.07 points, or 1.8%, to close at 15,885.02.
The S&P 500 declined 61.59 points, or 1.2%, to close at 5,061.82. All of the 11 broad sectors of the benchmark index closed in the red. The Technology Select Sector SPDR (XLK), the Real Estate Select Sector SPDR (XLRE) and the Consumer Discretionary Select Sector SPDR (XLY) slid 1.9%, 1.8% and 1.7%, respectively.
The fear-gauge CBOE Volatility Index (VIX) increased 11.1% to 19.23. A total of 11.5 billion shares were traded on Monday, higher than the last 20-session average of 11 billion. Decliners outnumbered advancers by a 5.1-to-1 ratio on the NYSE. On the Nasdaq, declining issues outnumbered advancing ones by a 3.5-to-1 ratio.
Geopolitical Tensions Weigh on the Markets
Iran’s retaliatory attack on Israel dominated the stock movement in Wall Street on Monday. The very idea that the situation can escalate into a full-blown war has dampened investor mood, because that might push the economy back into an inflation cycle.
If prices continue to rise, the Fed might consider tightening monetary policy all over again. At the very least, rate cuts would be further delayed. Market participants are, hence, keenly awaiting de-escalation. The effect of an anticipated war in the Middle East is already being felt in the markets. Mega-cap growth stocks have suffered because price pressures today would make them appear overvalued with respect to future prospects.
Treasury yields have started climbing up again, with talks of an economic slowdown going around. The U.S. 10-year treasury yield shot up by more than 11 basis points to 4.612%. The benchmark yield at one point hit its highest level since mid-November. The 2-year Treasury yield added more than 3 basis points, ending at 4.912%.
Consequently, shares of Apple Inc. (AAPL - Free Report) and NVIDIA Corporation (NVDA - Free Report) declined 2.2% and 2.5%, respectively. NVIDIA currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Economic Data
The U.S. Census Bureau announced that retail sales for March had increased 0.7% against a consensus of 0.3% rise for the period. The number for February, which was previously reported as a 0.6% increase, was revised up to 0.9%.
The Bureau also reported that business inventories had increased 0.4% in February. They were virtually unchanged in the month prior.