The major stock indexes continue to grind lower, starting the week on a down note. The Dow Jones Industrial Average slipped 93 points, or 0.3%, and the S&P 500 lost 27 points (0.8%). Meanwhile, the NASDAQ took the biggest hit, falling 110 points, or 1.0%. This resulted in the tech-heavy composite reaching a new two-year low.
Looking to today’s session, U.S. stock futures are pointing to a mixed open. In overnight trading, Asian markets were mixed but mostly down. Meanwhile, stocks in Europe are in the red. Elsewhere, oil futures are down 1.3%, to around $90 a barrel.
On Monday stateside, decliners edged out advancers among the major market sectors, with the largest losses posted by energy (-2.1%) and technology (-1.6%) stocks. On the plus side, industrials and consumer staples each gained about one-third of a percentage point. (Note: Bond markets in the United States were closed in observance of the Columbus Day holiday.)
Third-quarter earnings season gets under way in earnest this week, with a number of major banks reporting. These include Citigroup (C), JPMorgan (JPM), Morgan Stanley (MS), and Wells Fargo (WFC), all due to announce their latest results on Friday. Investors will be particularly keen to hear how rising interest rates are impacting corporate and consumer borrowing.
The week also brings a host of key data points. They include the Producer Price index report due Wednesday, the Consumer Price Index for September on Thursday, and last month’s retail sales figures on Friday. The price indexes, in particular, have the potential to result in a large move for equities. Many market participants are waiting for indications that the Federal Reserve can let up on its aggressive interest rate hikes. Should inflation come in lower than expected, it would be taken as a sign that the Fed’s monetary tightening is having the desired impact, and would encourage traders to bid up prices. However, the central bank likely has a long way to go before inflation begins to approach its target of 2%, so stocks will have trouble staging a sustainable rally until then. - Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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