Caterpillar boosts Dow; Nasdaq, S&P on track to end lower on Apple, Amazon results

Wall Street sign, New York City, USA


US stocks were mixed in a volatile trading session on Thursday, as a slide in Meta and other megacap technology names weighed on the Nasdaq and S&P. Dow steady in green, boosted by Caterpillar shares. Investors also digest data which showed a rebound in the US economy in Q3.

Amazon and Apple are in focus, as both companies are set to report results after the bell and end FAANG earnings.

By afternoon, the S&P 500 (SP500) was down 0.30% at 3,819.13 points, while the tech-heavy Nasdaq Composite (COMP.IND) had lost 1.36% at 10,822.16 points, as Meta plunged more than 20% on dire financial numbers. Both indices are on track for a two-day losing streak.

The blue-chip Dow (DJI) is up 0.88% at 32,119.31 points.

Six of the S&P’s 11 sectors are trading in the green, with Industrials and Financials the top gainers. Of the five sectors that declined, Communication Services was the biggest loser.

Q3 US GDP numbers came in at a higher than expected increase of 2.6% compared to a consensus of 2.3%. The data helped calm recession concerns, but also showed that the Federal Reserve’s rate hikes are still not having their full effect in terms of cooling the economy.

“It’s hard to say at this point that the Fed has made a big move in pushing economic growth below trend… A lot of nominal growth still needs to be taken out of the economy, which will likely take higher rates. of interest,” Seeking Alpha contributor Mott Says of Capital Management.

Quarterly earnings also focused on action on Thursday. Industrial bellwether Caterpillar, aerospace parts maker Honeywell, fast-food giant McDonald’s and drugmaker Merck were all acquired after their reports. Along with the rebound in Boeing shares, they helped lift the Dow.

In other earnings-related news, Comcast and ServiceNow also rose.

Bond markets extended their rally for a third straight day. The 10-year Treasury yield (US10Y) was down 7 basis points to 3.95% and the 2-year yield (US2Y) was down 9 basis points to 4.33%. The dollar index (DXY) is +0.7%.

“Demand for the 10-year note has been strong since hitting a high of 4.34% on Friday,” Caxton’s Michael Brown said. “Two factors seem to be driving this – pricing in a slower pace of Fed hikes, and some sheltered demand as a result of yesterday’s decline in risk appetite. A break below 4% could make it interesting Things are wobbly, and are bound to cause more headwinds for the dollar, which hit a 3-week low against a basket of peers on Wednesday.”

Earlier today, the European Central Bank raised interest rates by 75 basis points for a second consecutive meeting, in line with expectations.

Market participants widely expect the Fed to raise rates by 75 basis points at its policy meeting starting next Wednesday. Speculation that the central bank may signal a slowdown in quantitative easing has helped lift equities since last week.

“We expect the FOMC to keep its options open rather than give guidance that the pace of rate hikes is slowing in December,” said Jonathan Pingle of UBS. “Mathematically, the FOMC seems quite likely to slow the pace of hikes at some point. The federal funds rate should not be a monotonically increasing function forever,” he added.

In other economic news on the domestic front, the personal consumption price index came in at +4.2%, down from the previous +7.3% reading.

Initial jobless claims rose to 217K compared to an expected figure of 223K.

September durable goods orders came in at +0.4%, below the expected +0.6% level.

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