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Stock Market News For Oct 22, 2018

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Markets closed mostly lower on Friday as weak economic data overshadowed robust corporate earnings. Concerns regarding rapidly rising interest rates and rising trade tensions continued to make investors jittery. However, the Dow snapped its three-week losing streak, ending in positive territory. The S&P 500 closed almost flat and the Nasdaq ended in the red once again.

The Dow Jones Industrial Average (DJI) gained 0.3% to close at 25,444.34. The S&P 500 declined 0.04% to close at 2,767.78. The Nasdaq Composite Index closed at 7,449.03, declining 0.5%. A total of 7.59 billion shares were traded on Friday, lower than the last 20-session average of 7.8 billion shares. Decliners outnumbered advancers on the NYSE by a 1.04-to-1 ratio. On Nasdaq, a 2.25-to-1 ratio favored declining issues.

How did the Benchmark Perform?

The Dow shed 64.89 points, on the back of robust earnings. The 30-stock exchange rebounded led by a rally in shares of The Procter & Gamble Company (PG - Free Report) . Shares of Procter & Gamble jumped 8.8% after reporting impressive quarterly figures. The Dow also snapped its three-week losing streak. 

The rally in shares of Procter & Gamble also helped the consumer staples sector in the S&P 500. The Consumer Staples Select Sector SPDR (XLP) rose 2.3%. However, the Consumer Discrete Select Sector SPDR (XLY) and the Health Care Select Sector SPDR (XLV) offset the gains, declining 1% and 0.9%, respectively. The S&P 500 closed almost flat, shedding 1 point.

The tech-heavy Nasdaq gave up 36.11 points, as tech stocks pulled back. Shares of Facebook and Amazon.com, Inc. (AMZN - Free Report) declined 0.6% and 0.4%, respectively. Shares of Netflix, Inc. (NFLX - Free Report) declined 4.1%. Facebook has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Weak Economic Data

Also, according to the National Realtors Association, existing-home sales declined 3.4% in August, touching its lowest level since November 2015. The housing market continues to struggle, with home sales having fallen for the sixth straight month. Moreover, rising interest rates are expected to further slow demand. This once again weighed on markets, denting investors’ confidence. 

Global Trade Tensions Weigh on Markets

Rising geopolitical and trade tensions along with concerns of rapidly rising interest rates have been rattling markets for a while. On Friday, the worries continued as investors were closely watching the escalation of tensions between the United States and Saudi Arabia after Treasury Secretary Steven Mnuchin said that he has decided to pull out of an investment conference in Riyadh following the disappearance of Saudi journalist Jamal Khashoggi.

Moreover, on Thursday China said that its economy slowed down in the July-September quarter. China economy grew 6.5% in the July-September period, down from 6.7% registered in the previous quarter.

Although the disappointments were briefly overcome after officials said that they were focusing on supporting the stock markets, investors worried that if China experiences further crisis, the pain could spread out to other emerging economies and eventually to the United States. These fears offset robust corporate earnings, as investors continued to feel jittery, leading to huge selloffs.

Weekly Roundup

Markets experienced a choppy session at the beginning of last week with technology stocks suffering heavy losses. However, the reverses were somewhat pared on Tuesday on the back of strong corporate earnings. Stocks failed to hold on to gains mid-week after the minutes of the Fed’s September meeting showed that the central bank felt that interest rates should continue to rise till monetary policy becomes restrictive.

Moreover, worries of rapidly rising interest rates and escalating global tensions continued to dent investors’ sentiments throughout the week. For the week, S&P 500 gained 0.2%, while the Dow posted increased 0.4%. However, the Nasdaq declined 0.6%, extending its losses to the third consecutive week. 

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