| |
Financial Markets 11/04 15:29
NEW YORK (AP) -- Stocks fell on Wall Street, pulled down by losses in the
same big tech companies that have been the main drivers of the market's rally
so far this year. The S&P 500 slid 1.2% Tuesday. The Dow Jones Industrial
Average lost 0.5%. The drops in tech pulled the Nasdaq composite down 2%.
Palantir Technologies, which had more than doubled so far this year, slumped 8%
despite reporting results that beat analysts' forecasts. Nvidia also reversed
course with a loss of 4%. Metsera jumped after a bidding war for the drug
company heated up with a bid from Novo Nordisk.
THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.
NEW YORK (AP) -- Stocks fell in afternoon trading on Wall Street Tuesday,
pulled down by losses in the same big tech companies that have been the main
drivers of the market's rally so far this year.
The S&P 500 fell 1.2%. The Dow Jones Industrial Average fell 326 points, or
0.7%, as of 2:59 p.m. Eastern time. The technology-heavy Nasdaq composite sank
1.9%.
The losses were spread broadly throughout the S&P 500, but technology
companies were the biggest weights dragging the market lower.
Palantir Technologies, which had more than doubled so far this year, fell 9%
despite reporting results that beat analysts' forecasts.
Nvidia also reversed course from a day earlier, falling 3.8%, while
Microsoft fell 0.7%. Their huge values give them outsize influence over the
market's broader direction.
Wall Street remains focused on corporate earnings. Roughly three out of
every four companies within the S&P 500 have reported their latest results,
which have been mostly better than analysts expected.
"However, expectations for technology firms seem higher, and disappointments
appear to be having a disproportionately negative effect," Paul Christopher,
head of global investment strategy at Wells Fargo Investment Institute, wrote
in a note to investors.
Animal health care company Zoetis plunged 12.5% after cutting its sales
forecast for the year. Norwegian Cruise Line slid 15.3% after giving Wall
Street a mixed earnings report and forecast.
Uber slumped 5.7% despite reporting financial results that beat analysts'
expectations.
Several big companies will report their latest financial results later this
week, including McDonald's, Expedia Group and Qualcomm.
The latest round of corporate profit reports and forecasts have taken on
more significance for Wall Street amid the U.S. government shutdown. Investors
and economists are trying to gauge the health and direction of the U.S. economy
without the latest economic updates on inflation and employment.
The lack of timely economic data has also left the Federal Reserve without
many of the resources it needs to make decisions on interest rate policy. That
has added more doubts to whether the central bank will continue cutting its
benchmark interest rate amid stubborn inflation and a weakening job market.
Consumer prices rose 3% in September, the highest increase since January. At
the same time, hiring has stalled. That mix of conditions puts the Fed in a
tough position. Cutting rates to help the economy endure a weaking job market
could also result in hotter inflation. The government shutdown has already
resulted in a lack of monthly employment data for September and will likely
result in a lack of data on consumer prices for October.
President Donald Trump's volatile trade war with China and other nations has
also added to the ongoing uncertainty over the economy's path forward.
The central bank cut its benchmark interest rate in October for the second
time this year. Fed Chair Jerome Powell has cautioned that further rate cuts
aren't guaranteed. Other Fed members have since also expressed concerns about
more rate cuts with inflation remaining stubbornly above the central bank's
target of 2%.
Wall Street is forecasting a 70% chance of a rate cut at the Fed's next
meeting in December, according to CME FedWatch. That's down from a 90.5% a week
ago, just before the last Fed meeting.
Outside of earnings, Tesla fell 4.7% after Norway's sovereign wealth fund,
one of the electric car maker's biggest investors, said Tuesday that it will
vote against a proposed compensation package that could pay CEO Elon Musk as
much as $1 trillion over a decade.
There will be more than a dozen company proposals up for a vote Thursday
during Tesla's annual meeting, but none have generated more division than
Musk's potentially massive pay package.
Yum Brands jumped 6.6% after the company said it is considering selling its
selling its Pizza Hut unit, which has struggled to compete in a crowded pizza
market.
Novo Nordisk slipped 2.1% after it raised its offer to buy drugmaker
Metsera, which jumped 21.4%. Novo Nordisk is trying to outbid rival Pfizer,
which fell 1.5%.
European markets were mostly lower and Asian markets fell overnight.
Treasury yields edged lower in the bond market. The yield on the 10-year
Treasury edged down to 4.09% from 4.10% late Monday.
---------
itemid:c339a15fc5beb5a9a95510bde3c8a726
|
|
