Stock Market Today: Dow Wobbles As Bitcoin Rises

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After their best week in several months, US stocks posted modest gains on Monday, closing near their session highs. Inflationary fears remained on the radar as short-term interest rates hit their highest levels in 18 months. Investors also analyzed the latest economic data from China and expected a busy week of third-quarter earnings reporting after banks got off to a good start last week.

The


Dow Jones Industrial Average

closed 36 points, or 0.1%, down after losing some 260 points shortly after Monday’s opening bell. The


S&P 500

and


Nasdaq Composite

rose 0.3% and 0.8%, respectively, after opening the week in the red. This is the fourth consecutive win for both indices.

Investor concerns over familiar themes such as inflation, supply chain disruptions and central bank stimulus seemed to dissipate over the course of the day. Also in the spotlight on Monday, poor economic data from China, showing the macroeconomic impact of some of these forces.

China’s gross domestic product grew 4.9% year-on-year in the third quarter, while industrial production in September rose 3.1%. Both measures fell short of expectations.

“Manufacturing was hit hard by supply chain disruptions from Covid, with some port operations impacted in 3Q21 and chip shortages continued through the quarter,” said Iris Pang, chief economist for Greater China to ING bank.

Abroad, the


Shanghai Composite

the index slipped by 0.1% and the pan-European index


Stoxx 600

fell 0.5%.

The 10-year Treasury yield stabilized up 0.01 percentage point, at 1.58%, after surpassing 1.6% earlier in the day. Easing helped lift growth stocks in Monday’s session. Short-term interest rates have also increased; the 2-year yield climbed 0.02 percentage point to 0.42%, the highest since March 2020.

Bond yields have risen since late September, when the Federal Reserve suggested it was turning its attention to providing less accommodations to the economy. Higher interest rates can make borrowing less attractive to businesses, which in turn can stunt economic growth. Higher long-term returns also increase the discount rate on future corporate profits, making them less valuable today.

Growth sectors of the market generally outperformed value and defensive sectors. Consumer discretionary stocks were the best off in the S&P 500, rising 1.2% on Monday, followed by a 0.8% gain for technology. Utilities lagged for the day, ending down 0.9%.

Energy stocks made a major reversal midday, having been the best performing group in the S&P 500 on Monday morning, then ending the day mostly flat. A rise and then a fall in the price of oil were at the origin of this about-face: US futures on West Texas Intermediate crude reached a seven-year high above $ 83 a barrel, before ending up just 0.2% to $ 82.44.

The third quarter earnings season is gaining momentum this week, with 72 S&P 500 companies expected to report. Highlights will include results of notable companies in telecommunications, consumer staples, energy, technology, healthcare and the airline industry.

Albertsons (ticker: ACI) and


State Street
(STT) opened the ball on Monday.


Procter & Gamble
(PG),


Halliburton
(HAL), and


Johnson & johnson
(JNJ) are the highlights of Tuesday morning, followed by


Netflix
(NFLX) and


United Airlines Holdings
(UAL) after market close.

Large banks including


Bank of America
(BAC),


Goldman Sachs
(GS), and


Morgan stanley
(MS) said well-received gains last week. These banking companies, however, are less exposed to the supply chain and workforce issues that impact much of the economy. For the rest of the market, guidance and commentary from management on these and other factors could be particularly important, with analysts already expecting strong third quarter results.

“The S&P 500 3Q earnings estimate was revised up 11% during the quarter. This is the largest third quarter upward revision in 20 years, ”Morgan Stanley strategist Michael Wilson wrote in a report on Monday. “The question is how do management teams position risks – limited to 3Q / 4T? until 2022? This will determine the extent of the deceleration we see in the magnitude of earnings revisions, which has implications for the price level of the index. “

Elsewhere, the price of Bitcoin was approaching its all-time high of nearly $ 65,000 as U.S. regulators expected U.S. regulators to approve the first exchange-traded fund that tracks futures contracts on the price of Bitcoin. The main crypto was around 2% higher on Monday above $ 61,000.

Here are eight actions in motion on Monday:

Albertsons Companies shares rose 3.3% after the company reported earnings of 64 cents per share, beating estimates of 45 cents per share, on revenue of $ 16.5 billion, higher than expectations of $ 15.8 billion.

State Street stock jumped 2.3% after the company reported earnings of $ 2 per share, beating estimates of $ 1.92 per share, on revenue of $ 2.99 billion. dollars, higher than expectations of $ 2.96 billion.

Western Oil The stock (OXY) gained 4.1% after being upgraded to Buy from Hold on Truist and as the energy sector as a whole recovered.

Walt disney (DIS) stock fell 3% after being demoted to equal weight versus overweight at Barclays.

NetApp (NTAP) stock fell 4.3% after being demoted to Sell Neutral at Goldman Sachs.

You’re here The stock (TSLA) rose 3.2% before the release of its results on Wednesday. The company has already revealed that it delivered a record 241,000 vehicles in the third quarter.

Zillow Group (Z) shares fell 9.5% after the company suspended its home reversal business.

Macy’s (M) the stock jumped 17.5% after the Wall Street Journal reported that Saks Fifth Avenue was looking to IPO its e-commerce unit at a valuation of $ 6 billion. Activist investor Jana Partners is pushing Macy’s to do the same with its own online business.

Write to editors@barrons.com


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