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Stock Market News for Oct 23, 2019

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Wall Street closed in negative territory on Tuesday flowing weak earnings results of some corporate giants and a new bill introduced in the U.S. Senate that might hurt businesses of powerful social media players. Moreover, uncertainty about Brexit also raised investors’ concerns over global economy. All three major stock indexes ended in the red.

The Dow Jones Industrial Average (DJI) lost 0.2% to close at 26,788.10. The S&P 500 declined 0.4% to close at 2,995.99. Meanwhile, the Nasdaq Composite Index closed at 8,104.30, shedding 0.7%. The fear-gauge CBOE Volatility Index (VIX) increased 3.3% to close at 14.46. A total of 6.37 billion shares were traded Tuesday, lower than the last 20-session average of 6.49 billion. Advancers outnumbered decliners on the NYSE by a 1.44-to-1 ratio. On Nasdaq, a 1.13-to-1 ratio favored declining issues.

How Did The Benchmarks Perform?

The Dow closed in negative territory with 17 components of the 30-stock blue-chip index closing in the green while 13 ended in red. The Nasdaq Composite finished in the red due weak performance of large-cap technology stocks. The S&P 500 also ended in the red. The Energy Select Sector SPDR (XLE) gained 1.3% while the Technology Select Sector SPDR (XLK) lost 1.4%. Notably, six out of total 11 sectors of the benchmark index closed in the red while five finished in green.

Weak Earnings Results

McDonald's Corp. (MCD - Free Report) reported third-quarter 2019 results. Adjusted earnings came in at $2.11 per share, which missed the consensus mark of $2.20.In the third quarter, revenues of $5,340.6 million lagged the Zacks Consensus Estimate of $5,478 million. Consequently, share price plummeted 5%.

The Travelers Companies Inc. (TRV - Free Report) third-quarter 2019 core income of $1.43 per share missed the Zacks Consensus Estimate of $2.38. However, revenues of $8 billion were slightly above the Zacks Consensus Estimate of $7.9 billion.Meanwhile, share price plunged 8.3%.

New Bill Likely to Hurt Social Media Industry

On Oct 22, three U.S. senators, Mark Warner of Virginia and Richard Blumenthal of Connecticut from Democratic party along with Republican Sen. Josh Hawley of Missouri, introduced a bill make it easier for users to leave the leading social media platforms for another platform. The new bill, also known as ACCESS Act, will compel leading social media operators to make their user data more portable, as well as make their services inter-operable.

As a result of the instruction of this bill shares of major social media players, like, Facebook Inc. , Twitter Inc. and Snap Inc. (SNAP - Free Report) plummeted 3.9%, 3.2% and 4%, respectively. Snap carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Uncertainty About Brexit

On Oct 22, the UK parliament voted to advance prime minister Boris Johnson’s Brexit bill, the legislation that will put his Brexit deal into UK domestic law. However, the law makers rejected the timeline of Oct 31 indicating the parliament wanted more time to scrutinize the bill. Therefore, Brexit is unlikely to happen on scheduled date of Oct 31. Several British lawmakers are demanding three months extension to reach an amicable solution.

Economic Data

The National Association of Realtors reported that existing-home sales dropped 2.2% in September to 5.38 million, missing the consensus estimate of 5.50 million. Year over year, existing-home sales grew 3.9%. August’s data was revised slightly upward from 5.49 million to 5.50 million.

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