Late-Day Weakness Leads To Lower Close On Wall Street

wallstreet july24 27oct21 lt

Stocks turned in a lackluster performance throughout much of the trading day on Thursday before coming under pressure in the latter part of the session. The Dow and the S&P 500 slid firmly into negative territory, while the tech-heavy Nasdaq ended the day nearly flat.

After climbing as much as 0.8 percent, the Nasdaq finished the session up by just 0.12 points or less than a tenth of a percent at 15,235.84. Meanwhile, the Dow slumped 266.19 points or 0.7 percent to 35,490.69 and the S&P 500 fell 23.11 points or 0.5 percent to 4,551.68.

While a mixed reaction to the latest earnings news contributed to choppy trading early in the day, traders may have looked to cash in on recent strength in the markets in late-day trading.

With the drop on the day, the Dow and the S&P 500 gave back ground after ending Tuesday's trading at new record closing highs.

Shares of Twitter (TWTR) moved sharply lower on the day after the social media reported third quarter earnings that beat estimates but weaker than expected user growth.

Auto giant General Motors (GM) also came under pressure after reporting third quarter earnings and revenues that fell year-over-year.

Meanwhile, shares of Microsoft (MSFT) held on to a strong gain after the software giant reported fiscal first quarter results that beat analyst estimates on both the top and bottom lines.

Google parent Alphabet (GOOGL) also turned in a strong performance on the day after the company reported better than expected third quarter results.

On the U.S. economic front, the Commerce Department released a report showing durable goods orders pulled back by much less than expected in the month of September.

The Commerce Department said durable goods orders fell by 0.4 percent in September after jumping by a downwardly revised 1.3 percent in August.

Economists had expected durable goods orders to slump by 1.1 percent compared to the 1.8 percent spike that had been reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders climbed by 0.4 percent in September after rising by 0.3 percent in August. The increase matched economist estimates.

Sector News

Energy stocks saw substantial weakness on the day, moving sharply lower along with the price of crude oil. Crude for December delivery plunged $1.99 to $82.66 a barrel after a report showed a bigger than expected weekly increase in crude oil inventories.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plummeted by 5.1 percent and the NYSE Arca Oil Index tumbled by 2.4 percent.

Considerable weakness also emerged among steel stocks, as reflected by the 3.2 percent nosedive by the NYSE Arca Steel Index.

Banking stocks also showed a significant move to the downside on the day, with the KBW Bank Index slumping by 2.6 percent. The index continued to give back ground after reaching a record intraday high on Monday.

Tobacco, brokerage and biotechnology stocks also moved notably lower, while some strength remained visible among software stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Wednesday. Japan's Nikkei 225 Index closed just below the unchanged line, China's Shanghai Composite Index slumped by 1 percent and Hong Kong's Hang Seng Index tumbled by 1.6 percent.

The major European markets also moved to the downside on the day. While the French CAC 40 Index dipped by 0.2 percent, the German DAX Index and the U.K.'s FTSE 100 Index both fell by 0.3 percent.

In the bond market, treasuries moved notably higher over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slumped 9 basis points to 1.529 percent.

Looking Ahead

Trading on Thursday may continued to be impacted by reaction to the latest batch of earnings news, with eBay (EBAY), Ford (F), Lending Club (LC), and Raymond James (RJF) among the companies releasing their quarterly results after the close of today's trading.

Caterpillar (CAT), Comcast (CMCSA), Hershey (HSY), MasterCard (MA), Merck (MRK), and Yum! Brands (YUM) are also among the companies due to report their results before the start of trading on Thursday.

A preliminary reading on third quarter GDP may also attract attention on Thursday along with reports on weekly jobless claims and pending home sales.

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