- Bridgette Randall
- 05 Oct, 2023
- Frankfurt
European markets lacked direction and investors reviewed economic data in the Euro Area.
Market indexes in Frankfurt, Paris and London struggled to advance after a slow of mixed economic data added to market anxieties linked to economic growth worries and interest rate uncertainties.
Bond yields in the region also stayed elevated and currencies traded near six month lows after the dollar indexes edged higher.
Spain's industrial output declined for the fifth month in a row in August to 3.4% and fell 0.8% from the previous month, the statistical agency INE reported Thursday.
French industrial production declined 0.3% from the previous month in August and from the downwardly revised 0.5% increase in July, the statistical agency INSEE reported Thursday.
Industrial production decreased 0.5% from the previous month and reversed 2.5% increase in the previous month.
German Trade Surplus Widened In August
Germany's trade surplus widened to Є16.6 billion in August from Є15.9 billion in the previous month, DeStatis reported Thursday.
Calendar and seasonally adjusted exports decreased 1.2% to Є127.9 billion, the lowest in five months, and imports fell 0.4% to Є111.4 billion, the lowest since January 2022,
Exports declined 5.8% and imports fell 16.8% and trade surplus soared from Є4.3 billion or calendar and seasonally adjusted Є2 billion from a year ago.
In August 2023, calendar and seasonally adjusted goods worth Є69.6 billion were exported to the member states of the European Union and goods worth Є60 billion euros were imported from the region.
Compared to July 2023, calendar and seasonally adjusted exports to EU countries fell by 1.5% and imports increased by 1.9%.
Most exports outside the European Union went to the United States and most imports came from the People's Republic of China.
Exports to the United States fell 1.3% to Є13.3 billion, to China increased 1.2% to Є8.4 billion, and to the United Kingdom fell 4.2% to Є6.0 billion.
Imports from China declined 2.0% to Є13.0 billion, from the U.S fell 13.1% to Є7.6 billion and the U.K. dropped to Є3.0 billion.
In nominal terms, not calendar and seasonally adjusted, August exports were Є121.8 billion euros and imports Є107.4 billion.
Exports fell by 5.8% and imports declined 16.7% from a year ago.
The unadjusted foreign trade surplus soared to Є14.4 billion from Є0.4 billion a year ago.
Europe Indexes & Yields
The DAX index decreased 0.03% to 15,093.02, the CAC-40 index fell 0.04% to 6,994.09 and the FTSE 100 index rose 0.5% to 7,449.10.
The yield on 10-year German bonds increased to 2.94%, French bonds traded higher to 3.52%, the UK gilts edged up to 4.64% and Italian bonds rose to 4.93%.
The euro edged lower to a three-month low to $1.051, the British pound to $1.213 and the U.S. dollar fetched 91.58 Swiss cents.
Brent crude decreased $1.41 to $84.12 a barrel and the Dutch TTF natural gas edged lower by €1.12 to €37.22 per MWh.
Europe Stock Movers
Imperial Bands Plc rose 3.8% to 1,640.50 pence after the cigarettes maker reaffirmed annual outlook and announced a $1.3 billion of stock repurchase plan.
RM plc soared 0..7% to 59.40 pence after the supplier of technology to education sector agreed to sell its intellectual property for $2.2 million to Hilco Streambank.
Thales SA decreased 0.3% to €128.25 after the defense technology company signed a contract with Polska Grupa Zbrojeniowa, a Polish arms holding company, for the delivery of multiple combat systems for the Polish Navy.
Nordex SE 1.7% to €10.13 after the wind energy company received an order for 45 MW wind turbines from Enerfin, a renewable energy division of Elecnor Group, the Spanish engineering company.
Alstom SA plunged 37% to €13.54 after the rail transportation company lowered its free cash flow target because of higher production costs and delays in new orders.
SMA Solar Technology AG rose 10% to €61.60 after the company lifted its annual outlook citing improvements in its large scale and commercial divisions.
- Barry Adams
- 04 Oct, 2023
- New York City
Tech stocks rebounded after a weaker-than-expected private payrolls data edged bond yields lower.
Worries of higher interest rates dragging the U.S. economy into a recession kept buyers' enthusiasm in check on Wall Street.
Moreover, mortgage rates inching closer to 8% dampened the demand for mortgages to the level last seen in 1996.
The average mortgage contract interest rate for conforming loan balances jumped 12 basis points to 7.53% in the week ended on September 29, the Mortgage Bankers Association reported Wednesday.
A year ago, mortgage rates were one percentage point lower at 6.75%.
For two months the direction of interest rates has been determining the direction of stock prices, and that trend was in full-display again today.
The S&P 500 index and the Nasdaq Composite struggled to advance and yields on Treasury notes and bonds edged lower from 2007-highs reached in the previous session.
Private sector payrolls data released by the ADP suggested weaker-than-expected jobs gain of 89,000 in September.
The increase in payrolls fell sharply from 180,000 in July.
The ADP data series is highly volatile and the monthly estimates are subject to significant revisions, but the gains fell short of expectations of an increase of as much 155,000 by economists surveyed by Ticker.com.
Investors shifted attention to the upcoming earnings season and banks were in focus.
Investors are looking to get more clues about the impact of higher interest rates and new capital requirements at banks of all sizes amid rising losses in Treasury securities held-to-maturity and available-for-sale.
Manufactured Goods Orders Increased In August
New orders for manufactured goods in August, up five of the last six months, increased $6.7 billion or 1.2% to $586.1 billion, the U.S. Census Bureau reported Wednesday.
New orders rose at a slower pace after rising 2.1% in July.
Durable goods orders increase in August was revised lower to 0.1% from the previous estimate of an increase of 0.2%.
Excluding transportation, new orders increased 1.4% and excluding volatile defense orders rose 0.8%.
U.S. Indexes & Yields
The S&P 500 index gained 0.7% to 4,265.33 and the Nasdaq Composite rose 1.5% to 13,246.53.
The yield on 2-year Treasury notes increased to 5.12%, 10-year Treasury notes inched lower to 4.77% and 30-year Treasury bonds edged down to 4.89%.
Crude oil decreased $4.39 to $84.83 a barrel and natural gas prices increased 6 cents to $3.11 a thermal unit.
The dollar index edged lower to 106.71, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Cal-Maine Foods Inc plunged 7.7% to $44.05 after the egg producer reported sharply lower sales in its latest quarter after prices declined.
The company also reported earnings of 2 cents per share, lower than the estimate of as high as 30 cents set by some analysts.
Intel Corporation declined 0.4% to $35.57 after the advanced chipmaker said it plans to operate its programmable chip division as a standalone unit in preparation of a public offering in the next two years.
European Markets Rebounded After Wholesale Inflation Data
European market indexes reversed early losses in the session and investors reviewed the latest batch of economic data in the region.
Market indexes opened lower tracking losses on Wall Street and bond yields in the region advanced after the U.S. Treasury yields jumped to 16-year highs.
Market averages traded around flatline after the European Central Bank president Christine Lagarde reiterated today that interest rates are likely to stay elevated for some time to cool inflation.
Tough talk from central bank president rang hollow as central bank has no timeline in bringing down inflation to its target rate of 2%.
Moreover the decline in wholesale price index also supported market advance in today's session.
Euro Area Retail Sales Declined In August
Retail sales in the Euro Area decreased 1.2% from the previous month in August, Eurostat reported Wednesday.
Automotive fuel sales declined 3% in the month compared to 0.6% fall in July after prices rose.
Sales of food, drink and tobacco decreased 1.2% after staying flat in the previous month and sales of non-food products fell 0.9% after rising for four months in a row.
Retail sales declined 2.1% from a year ago, following a 1% decline in July and extended fall for the 11th month in a row.
Record Fall In Wholesale Inflation
Wholesale price index or producer prices declined 11.5% from a year ago in August. Eurostat reported Wednesday.
The measure of wholesale inflation declined at the fastest pace on record after energy prices dropped 30.6% compared to 24.2% in July and intermediate goods prices decreased 4.5% compared to 4% in the previous month.
Prices rose at a slower pace for capital goods at 4.3% compared to 4.7%, for durable goods at 4.7% from 5.1% and non-durable goods at 6.7% from 7.6% in the previous month respectively.
Excluding energy, core producer prices decreased 1% compared to 1.6% in July.
Europe Indexes & Yields
The DAX index increased 0.1% to 15,099.99, the CAC-40 index decreased 0.005% to 6,996.73 and the FTSE 100 index dropped 0.7% to 7,412.25.
The yield on 10-year German bonds increased to 2.94%, French bonds traded higher to 3.52%, the UK gilts edged up to 4.59% and Italian bonds rose to 4.93%.
The euro edged lower to a three-month low to $1.05, the British pound to $1.21 and the U.S. dollar fetched 91.76 Swiss cents.
Brent crude decreased $5.05 to $86.34 a barrel and the Dutch TTF natural gas edged lower by €1.44 to €38.24 per MWh.
Europe Stock Movers
Novartis AG decreased 4.5% to CHF 88.01 after the Swiss pharmaceutical company completed the spinoff of its generic pharma division Sandoz though a dividend-in-kind distribution to its shareholders and American Deposit Receipt holders.
Tesco Plc rose 3.9% to 269.60 pence after the British grocery retailer lifted its annual earnings outlook.
Spirent Communications Plc plunged 31.3% to 90.35 pence after the British Telecom controlled testing services provider lowered its outlook.
Superdry Plc soared 20% to 52.06 pence after the struggling fashion retailer said it plans to sell its digital and intellectual assets in South Asia to Reliance Retail.
SAS AB plunged 82.5% to 0.053 Swedish kronor after the Scandinavian airline announced restructuring plan late Tuesday that wipes out shareholders and hybrid bond holders.
After the restructuring, U.S. investment group Castlelake will control 32% stake in the airline followed by 20% held by Air France-KLM Group.
The Danish government is expected to hold 26% stake in the airline and the Danish investment company Lind will own 8.6% stake.
- Scott Peters
- 04 Oct, 2023
- New York City
Cal-Maine Foods Inc plunged 7.7% to $44.05 after the egg producer reported sharply lower sales in its latest quarter after prices declined.
Revenue in the fiscal first quarter ending in September decreased to $459.3 million from $658.3 million and net income plunged to $926,000 from $125.1 million and diluted earnings per share plunged to 2 cents from 2 cents from $2.57 a year ago.
Dozens eggs sold declined to 273.1 million from 275.3 million and net average selling price per dozen plunged to $1.58 from $2.27 a year ago.
Intel Corporation declined 0.4% to $35.57 after the advanced chipmaker said it plans to operate its programmable chip division as a standalone unit in preparation of a public offering in the next two years.
Energy stocks declined in active trading after crude oil prices fell $5 to $84.27 a barrel.
Exxon Mobil decreased 4.5% to $110.54, Chevron Corp declined 3% to $161.93, Marathon Petroleum dropped fell4% to $141.32 and Hess Corp plunged 5% to $141.92.
Insulet Corporation dropped 3.5% to $151.21 after the company said Wayde McMillan would step down from the office of chief financial officer.
Cruise lines operators advanced after crude oil prices fell sharply.
Carnival Corp rose 2.5% to $13.06, Royal Caribbean Cruises Ltd added 2.4% to $88.87 and Norwegian Cruise Line Holdings added 2.6% to $16.31.
- Barry Adams
- 04 Oct, 2023
- New York City
For two months direction of interest rates have been determining direction of stocks and that trends was in full-display again today.
The S&P 500 index and the Nasdaq Composite struggled to advance and yields on Treasury notes and bonds edged lower from 2007-highs reached in the previous session.
Private sector payrolls data released by the ADP suggested weaker-than-expected jobs gain of 89,000 in September.
The increase in payrolls fell sharply from 180,000 in July.
The ADP data series is volatile and the monthly estimates are subject to significant revisions, but the gains fell short of expectations of an increase of as much 155,000 set by some economists surveyed by Ticker.com.
Investors shifted attention to upcoming earnings season and banks were in focus.
Investors are looking get more clues about the impact of higher interest rates and new capital requirements at banks of all sizes.
Manufactured Goods Orders Increased In August
New orders for manufactured goods in August, up five of the last six months, increased $6.7 billion or 1.2% to $586.1 billion, the U.S. Census Bureau reported Wednesday.
New orders rose at a slower pace after rising 2.1% in July.
Durable goods orders increase in August was revised lower to 0.1% from the previous estimate of an increase of 0.2%.
Excluding transportation, new orders increased 1.4% and excluding volatile defense orders rose 0.8%.
U.S. Indexes & Yields
The S&P 500 index edged down 0.02% to 4,228.33 and the Nasdaq Composite rose 0.3% to 13,093.69.
The yield on 2-year Treasury notes increased to 5.12%, 10-year Treasury notes inched lower to 4.77% and 30-year Treasury bonds edged down to 4.89%.
Crude oil decreased $2.48 to $86.42 a barrel and natural gas prices increased 6 cents to $3.11 a thermal unit.
The dollar index edged lower to 106.91, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Cal-Maine Foods Inc plunged 7.7% to $44.05 after the egg producer reported sharply lower sales in its latest quarter after prices declined.
The company also reported earnings of 2 cents per share, lower than the estimate of as high as 30 cents set by some analysts.
Intel Corporation declined 0.4% to $35.57 after the advanced chipmaker said it plans to operate its programmable chip division as a standalone unit in preparation of a public offering in the next two years.
- Inga Muller
- 04 Oct, 2023
- Frankfurt
Market indexes in Europe rebounded and the euro hovered near its one-year low and bond yields advanced to 12-year highs.
The DAX index increased 0.4% to 15,132.79, the CAC-40 index added 0.4% to 7,028.63 and the FTSE 100 index rose 0.2% to 7,472.03.
The yield on 10-year German bonds increased to 2.94%, French bonds traded higher to 3.52%, the UK gilts edged up to 4.59% and Italian bonds rose to 4.93%.
Novartis AG decreased 4.5% to CHF 88.01 after the Swiss pharmaceutical company completed the spinoff of its generic pharma division Sandoz though a dividend-in-kind distribution to its shareholders and American Deposit Receipt holders.
Tesco Plc rose 3.9% to 269.60 pence after the British grocery retailer lifted its annual earnings outlook.
Spirent Communications Plc plunged 31.3% to 90.35 pence after the British Telecom controlled testing services provider lowered its outlook.
Superdry Plc soared 20% to 52.06 pence after the struggling fashion retailer said it plans to sell its digital and intellectual assets in South Asia to Reliance Retail.
- Bridgette Randall
- 04 Oct, 2023
- Frankfurt
European market indexes reversed early losses in the session and investors reviewed the latest batch of economic data in the region.
Market indexes opened lower tracking losses on Wall Street and bond yields in the region advanced after the U.S. Treasury yields jumped to 16-year highs.
Market averages traded around flatline after the European Central Bank president Christine Lagarde reiterated today that interest rates are likely to stay elevated for some time to cool inflation.
Tough talk from central bank president rang hollow as central bank has no timeline in bringing down inflation to its target rate of 2%.
Moreover the decline in wholesale price index also supported market advance in today's session.
Euro Area Retail Sales Declined In August
Retail sales in the Euro Area decreased 1.2% from the previous month in August, Eurostat reported Wednesday.
Automotive fuel sales declined 3% in the month compared to 0.6% fall in July after prices rose.
Sales of food, drink and tobacco decreased 1.2% after staying flat in the previous month and sales of non-food products fell 0.9% after rising for four months in a row.
Retail sales declined 2.1% from a year ago, following a 1% decline in July and extended fall for the 11th month in a row.
Record Fall In Wholesale Inflation
Wholesale price index or producer prices declined 11.5% from a year ago in August. Eurostat reported Wednesday.
The measure of wholesale inflation declined at the fastest pace on record after energy prices dropped 30.6% compared to 24.2% in July and intermediate goods prices decreased 4.5% compared to 4% in the previous month.
Prices rose at a slower pace for capital goods at 4.3% compared to 4.7%, for durable goods at 4.7% from 5.1% and non-durable goods at 6.7% from 7.6% in the previous month respectively.
Excluding energy, core producer prices decreased 1% compared to 1.6% in July.
Europe Indexes & Yields
The DAX index increased 0.4% to 15,132.79, the CAC-40 index added 0.4% to 7,028.63 and the FTSE 100 index rose 0.2% to 7,472.03.
The yield on 10-year German bonds increased to 2.94%, French bonds traded higher to 3.52%, the UK gilts edged up to 4.59% and Italian bonds rose to 4.93%.
The euro edged lower to a three-month low to $1.05, the British pound to $1.21 and the U.S. dollar fetched 91.76 Swiss cents.
Brent crude decreased $1.65 to $89.25 a barrel and the Dutch TTF natural gas edged lower by €0.21 to €37.20 per MWh.
Europe Stock Movers
Novartis AG decreased 4.5% to CHF 88.01 after the Swiss pharmaceutical company completed the spinoff of its generic pharma division Sandoz though a dividend-in-kind distribution to its shareholders and American Deposit Receipt holders.
Tesco Plc rose 3.9% to 269.60 pence after the British grocery retailer lifted its annual earnings outlook.
Spirent Communications Plc plunged 31.3% to 90.35 pence after the British Telecom controlled testing services provider lowered its outlook.
Superdry Plc soared 20% to 52.06 pence after the struggling fashion retailer said it plans to sell its digital and intellectual assets in South Asia to Reliance Retail.
- Barry Adams
- 03 Oct, 2023
- New York City
Market averages accelerated decline in the afternoon as the selloff in Treasury yields spread to longer-dated maturities.
Political turmoil in Washington also heightened market anxieties after divided Republicans struggled to rally behind Speaker Kevin McCarthy.
The House is likely to remain without a leader for weeks if not months, increasing political dysfunction and may prompt rating agencies to place the U.S. debt on a negative watch list.
Rising U.S. Treasury yields added more downward pressure on market indexes and investors stayed cautious ahead of earnings season kickoff.
The S&P 500 index and the Nasdaq Composite trended lower after the yield on 10-year Treasury notes jumped to a high not seen since August 2007.
After months of hoping that interest rates are nearing peak rates, investors abandoned the expectations of the Federal Reserve lowering rates this year.
Instead, the Federal Reserve suggested one more rate hike at the end of the last meeting two weeks ago and also signaled that higher rates are likely to stay longer well into 2024.
In the last two weeks, the yields on 2-year and 5-year Treasury notes edged higher and now the yields are rising on 10-year, 20-year and 30-year Treasury bonds.
Stock market clearly noticed the rising bond yields, as higher bond yields attract more capital away from stocks and present value of future earnings of tech and high tech stocks lose value because of higher interest rates.
Moreover, surging crude oil prices in the last two months have reignited fears of higher inflation after months of decline in overall inflation.
Tight labor market conditions also contributed to the rise in Treasury yields in today's trading.
The number of job openings increased to 9.6 million at the end of August, the Bureau of Labor Statistics reported Tuesday.
Job openings increased 5.8% or 690,000 in the month from a year ago.
The higher job openings highlighted persistent tight labor conditions despite multiple interest rate hikes and elevated inflation.
Over the month, the number of hires rose modestly by 35,000 and separations changed little at 5.9 million and 5.7 million respectively.
U.S. Indexes & Yields
The S&P 500 index edged down 1.4% to 4,229.45 and the Nasdaq Composite fell 1.9% to 13,059.47.
The yield on 2-year Treasury notes increased to 5.15%, 10-year Treasury notes inched lower to 4.79% and 30-year Treasury bonds edged down to 4.92%.
Crude oil increased $0.58 to $89.41 a barrel and natural gas prices increased 9 cents to $2.93 a thermal unit.
The dollar index edged higher to 107.02, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Macy's Inc declined 0.5% to $11.49 after the department store operator said it plans to open 30 smaller stores in strip malls over the next two years.
The retailer hopes that smaller stores with limited merchandise and modern look will appeal to younger customers who do not frequent large malls.
Point Biopharma Inc soared 84% to $12.23 after the company agreed to be acquired by Eli Lilly for $12.50 a share in cash or $1.4 billion.
Eli Lilly & Company decreased 1.1% to $532.39.
McCormick & Company Inc dropped 7.8% to $68.86 after the spice maker reported quarterly results.
Revenue in the third quarter ending in August increased 6% to $1.7 billion from $1.6 billion and net income dropped to $170 million from $222.9 million and diluted earnings per share dropped to 63 cents from 83 cents a year ago.
The company reiterated its sales and operating earnings outlook for 2023.
Revenue in 2023 is expected to increase between 5% and 7%, primarily driven by price increases and operating income is expected to increase between 11% and 13% from $864 million and diluted earnings per share between $2.46 and $2.51 compared to $2.52 in 2022.
In Europe Bond Yields and Currencies Diverge
European market indexes hovered near flatline after twin worries of interest rates and inflation drove market sentiment.
Market indexes in Paris and Frankfurt declined but in London rose amid ongoing interest rate uncertainties and elevated inflation.
Policymakers of central banks in the Euro Area and UK continue to send hawkish messages about bringing down inflation but their actions fall short.
Despite tough talk by policymakers and reiterating commitment in bringing down inflation, interest rates remain far from restrictive, prices are still rising and there is no deadline for lowering inflation to target rate of 2%.
Inflation has declined since peaking above 7% in the Euro Area and 9% in the UK, but most of the weakening in inflation is because of base effect.
Policymakers have engaged in double-talk on inflation, on one hand sending hawkish statements about their commitment in lowering inflation, on the other hand keeling the rates far from restrictive and not setting a deadline for bringing down inflation rate to 2%.
UK Retail Price Inflation Eased In September
Retail prices rose at a slower pace of 6.2% in September after rising at 6.9% in August, the British Retail Consortium said on Tuesday.
The retail price inflation was the slowest since September 2022, and food price inflation eased to 9.9% from 11.5% in the previous month and eased for the first on a monthly basis in more than two years.
Spain's Unemployed Expanded In September
Spain's registered jobless people increased by 0.7% or 19,768 to 2.72 million in September, the ministry of employment and social security reported Tuesday.
Europe Indexes & Yields
The DAX index decreased 0.3% to 15,085.21, the CAC-40 index eased 1.0% to 6,997.05 and the FTSE 100 index fell 0.5% to 7,470.16.
The yield on 10-year German bonds increased to 2.93%, French bonds traded higher to 3.50%, the UK gilts edged up to 4.54% and Italian bonds rose to 4.85%.
The euro edged lower to a three-month low to $1.048, the British pound to $1.205 and the U.S. dollar fetched 92.25 Swiss cents.
Brent crude increased $0.51 to $91.22 a barrel and the Dutch TTF natural gas edged lower by €2.33 to €36.99 per MWh.
Europe Stock Movers
Boohoo Group plunged 9.9% to 28.43 pence after the reported a wider first-half loss in the first-half after revenue declined.
The online fashion retailer also lowered its 2024 outlook citing weak demand and macroeconomic headwinds.
Sika AG declined 0.4% to CHF 229.20 after the Swiss chemical company raised its annual sales outlook.
Petrofac Ltd decreased 0.7% to 71.0 pence and the oil service company won a $600 million carbon capture project from ADNOC Gas located at Habshan, UAE.
Kingfisher Plc declined 2.0% to 212.20 pence after the company launched £50 million of the £300 million stock repurchase plan.
Greggs Plc decreased 2.9% to 2,406.0 pence after the company said it has no plans to raise prices before Christmas holiday.
- Brian Turner
- 03 Oct, 2023
- New York City
The number of job openings increased to 9.6 million at the end of August, the Bureau of Labor Statistics reported Tuesday.
Job openings increased 5.8% or 690,000 in the month from a year ago.
The higher job openings highlighted persistent tight labor conditions despite multiple interest rate hikes and elevated inflation.
Over the month, the number of hires rose modestly by 35,000 and separations changed little at 5.9 million and 5.7 million respectively.
Over the month, job openings increased in professional and business services by 509,000, finance and insurance by 96,000, state and local government education by 76,000, nondurable goods manufacturing by 59,000, and federal government by 31,000.
The number of separations, quits and layoffs were little changed in the month.
The number of total separations in August was little changed at 5.7 million, and the rate was unchanged at 3.6%, the number of quits changed little at 3.6 million and the rate was unchanged at 2.3% and the number of layoffs and discharges changed little at 1.7 million, and the rate held at 1.1 %.
The number of job openings have been on the decline after peaking at 12 million in March 2022, and the openings fell as low as 8.9 million in July 2023.
- Scott Peters
- 03 Oct, 2023
- New York City
Tech stocks led the decliners on Wall Street after Treasury selloff deepened and spread to longer dated maturities.
The S&P 500 index edged up 0.006% to 4,288.39 and the Nasdaq Composite rose 0.7% to 13,307.77.
The yield on 2-year Treasury notes increased to 5.11%, 10-year Treasury notes inched lower to 4.72% and 30-year Treasury bonds edged down to 4.85%.
Macy's Inc declined 0.5% to $11.49 after the department store operator said it plans to open 30 smaller stores in strip malls over the next two years.
The retailer hopes that smaller stores with limited merchandise and modern look will appeal to younger customers who do not frequent large malls.
Point Biopharma Inc soared 84% to $12.23 after the company agreed to be acquired by Eli Lilly for $12.50 a share in cash or $1.4 billion.
Eli Lilly & Company decreased 1.1% to $532.39.
McCormick & Company Inc dropped 7.8% to $68.86 after the spice maker reported quarterly results.
Revenue in the third quarter ending in August increased 6% to $1.7 billion from $1.6 billion and net income dropped to $170 million from $222.9 million and diluted earnings per share dropped to 63 cents from 83 cents a year ago.
The company reiterated its sales and operating earnings outlook for 2023.
Revenue in 2023 is expected to increase between 5% and 7%, primarily driven by price increases and operating income is expected to increase between 11% and 13% from $864 million and diluted earnings per share between $2.46 and $2.51 compared to $2.52 in 2022.
- Barry Adams
- 03 Oct, 2023
- New York City
Rising U.S. Treasury yields added more downward pressure on market indexes and investors stayed cautious ahead of earnings season kickoff.
The S&P 500 index and the Nasdaq Composite trended lower after the yield on 10-year Treasury notes jumped to a high not seen since August 2007.
After months of hoping that interest rates are nearing peak rates, investors abandoned the expectations of the Federal Reserve lowering rates this year.
Instead, the Federal Reserve suggested one more rate hike at the end of the last meeting two weeks ago and also signaled that higher rates are likely to stay longer well into 2024.
In the last two weeks, the yields on 2-year and 5-year Treasury notes edged higher and now the yields are rising on 10-year, 20-year and 30-year Treasury bonds.
Stock market clearly noticed the rising bond yields, as higher bond yields attract more capital away from stocks and present value of future earnings of tech and high tech stocks lose value because of higher interest rates.
Moreover, surging crude oil prices in the last two months have reignited fears of higher inflation after months of decline in overall inflation.
U.S. Indexes & Yields
The S&P 500 index edged up 0.006% to 4,288.39 and the Nasdaq Composite rose 0.7% to 13,307.77.
The yield on 2-year Treasury notes increased to 5.11%, 10-year Treasury notes inched lower to 4.72% and 30-year Treasury bonds edged down to 4.85%.
Crude oil increased $0.19 to $89.01 a barrel and natural gas prices increased 4 cents to $2.88 a thermal unit.
The dollar index edged higher to 107.19, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Macy's Inc declined 0.5% to $11.49 after the department store operator said it plans to open 30 smaller stores in strip malls over the next two years.
The retailer hopes that smaller stores with limited merchandise and modern look will appeal to younger customers who do not frequent large malls.
Point Biopharma Inc soared 84% to $12.23 after the company agreed to be acquired by Eli Lilly for $12.50 a share in cash or $1.4 billion.
Eli Lilly & Company decreased 1.1% to $532.39.
McCormick & Company Inc dropped 7.8% to $68.86 after the spice maker reported quarterly results.
Revenue in the third quarter ending in August increased 6% to $1.7 billion from $1.6 billion and net income dropped to $170 million from $222.9 million and diluted earnings per share dropped to 63 cents from 83 cents a year ago.
The company reiterated its sales and operating earnings outlook for 2023.
Revenue in 2023 is expected to increase between 5% and 7%, primarily driven by price increases and operating income is expected to increase between 11% and 13% from $864 million and diluted earnings per share between $2.46 and $2.51 compared to $2.52 in 2022.