Wall Street Today | Nasdaq 3rd Week in the Red Despite Boost From Amazon Earnings
RECAP
Indexes began the day with rallies but only $Nasdaq Composite Index (.IXIC.US)$ finished barely in the green, buoyed by Amazon.com earnings, but the index fell nearly 7% during the week. $S&P 500 Index (.SPX.US)$ fell about 6% for the week, and $Dow Jones Industrial Average (.DJI.US)$ nearly 5% for the week. Oil prices rose as Israel launched further raids into the Gaza Strip. The banking sector fell as investors digested high GDP data but dissapointing earnings reports.
The $Financial Select Sector SPDR Fund (XLF.US)$ dropped 1.7% toward a seven-month low in afternoon trading, with 67 of 72 equity components losing ground. The ETF has shed 5.1% month to date, and headed for the first three-month losing streak since April 2022.
MACRO
Consumer Spending Rises Sharply Again and Buoys Economy
The numbers: Consumer spending rose a sharp 0.7% in September, underscoring the recent strength in the U.S. economy. Analysts polled by the Wall Street Journal had forecast a 0.5% gain. The PCE Price Index rose 3.4% year over year vs 3.4% forecast. Month over month, the index rose 0.4% vs 0.3% expected.
War Fears Drive Gold and Oil Higher; S&P 500 Drops
A rebound in stocks sputtered, with the S&P 500 extending a slide from its July peak to 10% — the threshold of a “correction.”
Bloomberg reported that US stocks are in their third month of decline after bond yields soared on worries about a persistently hawkish Federal Reserve. Concern about the war in the Middle East and an underwhelming corporate earnings season have dented risk appetite more recently.
“The aggressive market selloff has been driven largely by technical factors, as fundamentals remain solid,” said Mark Hackett, chief of investment research at Nationwide. “Signs of oversold conditions and supportive seasonality should lead to a bounce, though sentiment must shift, which could take a catalyst or a period of capitulation.”
SECTORS
Oil Rises as Israel Military Expands Ground Activity in Gaza
Oil rose to its highs of the day after Israel’s military said it was “expanding ground activity” in Gaza this evening, reviving concerns about the conflict spreading more broadly. The announcement from the Israeli Defense Forces pushed West Texas Intermediate up as much as 3.2%.
The news helped crude rebound after a 3.3% drop due to bearish market sentiment and earlier signs of Israel rethinking the scope of its ground invasion. The drumbeat of geopolitical headlines that buffeted oil prices on Friday continued a trend that has pushed oil’s 30-day volatility to the highest in three months.
Gold Outperforming Stocks in 2023, Passes $2,000
Gold futures climbed sharply in electronic trading Friday, with prices for the most-active contract touching their highest intraday levels since May. Developments in the Israel-Hamas war sparked a fresh rush to safety among investors. The Israeli army increased its air attacks in Gaza and its ground forces are "expanding their activity" in the Gaza Strip, CNBC reported Friday.
COMPANIES
Nasdaq Headed for 3rd Week in the Red Despite Boost From Strong Amazon Earnings
$Amazon (AMZN.US)$ reported earnings that surpassed expectations which showed the company's progress in lifting margins, both in its retail business and in cloud. $Intel (INTC.US)$ also beat estimates. The earnings were another bright spot among the so-called "Magnificent Seven" companies after disappointing earnings from Tesla Inc. and Alphabet Inc., along with a weak report from Facebook parent Meta Platforms Inc.
JPMorgan Shares Fall as CEO Jamie Dimon Family Plan to Sell Part of Holdings Starting in 2024
$JPMorgan (JPM.US)$ said Friday that Chair and Chief Executive Jamie Dimon and his family plan to sell a portion of their holdings of company stock "for financial diversification and tax-planning purposes."
Bank of America Drops as Bank Sector Suffers Broad Beating
Banking stocks were taking a broad beating Friday as uncertainty about the health of the economy and an apparent lack of positive catalysts give investors continued pause. BofA's stock fell to a 3-year low.
Ford Drops More Than 10% as CEO Says Automaker Won't Scrap Combustion and Hybrid Vehicles for EVs
$Ford Motor (F.US)$ sank nearly 12% intraday Friday after CEO Jim Farley said a day earlier that the company will continue to focus on gas-powered vehicles and hybrids while it scales its EV business.
Sanofi Plunges Some 20% on Plans to Spin Off Consumer-Healthcare Business
French drug giant $Sanofi (SNY.US)$ tumbled as much as 20% intraday Friday in New York trading on plans to spin off its consumer-health business, which includes well-known brands like allergy medicine Allegra and the pain treatments IcyHot and Aspercreme.
Exxon, Chevron Profits Surge Following Megadeals
On the heels of competing megadeals, Exxon Movil and Chevron reported a combined $15.6 billion profits Friday, as oil and fuel prices climbed in the third quarter. $Exxon Mobil (XOM.US)$'s quarterly earnings of $9.1 billion were less than half of last year's quarterly record but rose 15% from the previous quarter.
$Chevron (CVX.US)$ said it banked $6.5 billion in third-quarter earnings, up 8.5% from the previous quarter, though it sank from $11.2 billion in the same period last year.
Source: Bloomberg, Dow Jones, CNBC
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