Tech stocks lift Nasdaq, banks weigh S&P 500 and Dow
- JPMorgan drops, BlackRock gains on strong third quarter earnings
- Apple drops after iPhone production slump announced
- Indices: Dow down 0.33%, S&P stable, Nasdaq up 0.42%
October 13 (Reuters) – The Nasdaq rose on Wednesday as investors looked at the perceived safety of tech stocks amid concerns about rising inflation, as a flattening of the Treasury yield curve hit bank stocks.
A Labor Department report showed consumer prices rose sharply in September, further strengthening the case for an interest rate hike by the Federal Reserve. Read more
“If the recent pace of high inflation continues, it could push the Fed to start shedding homes as soon as possible, which could hurt stocks and other risky assets,” said Nancy Davis, founder of Quadratic Capital Management in Greenwich, Connecticut.
The Fed announced last month that it would start cutting pandemic-era stimulus in November, while policymakers were roughly evenly divided over whether rate hikes should start. next year or in 2023.
However, following the latest inflation data, federal funds rate futures, which track short-term interest rate expectations, have forecast a quarter-point tightening by now. September of next year. Read more
The focus will now be on the minutes of the central bank’s policy meeting in September, scheduled for later today, for further signs that the days of crisis politics were numbered. Read more
Technology (.SPLRCT) and communications services (.SPLRCL) were among the few winners among S&P’s top 11 sectors, while energy (.SPNY) and financials (.SPSY) led the declines.
Mega-cap growth names including Amazon.com Inc (AMZN.O), Google Parent Alphabet (GOOGL.O), Microsoft Corp (MSFT.O) and Tesla (TSLA.O) rose, while chipmakers (.SOX) added 0.8% after three days of losses.
However, bank stocks (.SPXBK) were down 1.3%, reflecting a decline in the 10-year Treasury yield.
JPMorgan Chase & Co (JPM.N) fell 2.2% and weighed the most on the Dow Jones and S&P 500 despite beating expectations in the third quarter, helped by the global trading boom and the release of no more loan loss reserves. Read more
Peers Bank of America (BAC.N), Citigroup (CN), Wells Fargo (WFC.N) and Morgan Stanley (MS.N) will report their results on Thursday, while Goldman Sachs (GS.N) will report their results on Friday.
BlackRock Inc (BLK.N) rose 3.7% after the world’s largest fund manager topped quarterly profit estimates as the improving economy helped boost its assets under management, leading to a increase in commission income. Read more
Analysts expect U.S. companies to post strong profit growth in the third quarter as concerns over supply chain issues and rising prices affect companies emerging from the pandemic.
As of 11:58 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 114.23 points, or 0.33%, to 34,264.11, the S&P 500 (.SPX) was down 0.78 point, or 0.02%, to 4,349.87, and the Nasdaq Composite (.IXIC) gained 61.15 points, or 0.42%, to 14,527.07.
Among other actions, Apple Inc (AAPL.O) fell 1.4% after a report said the iPhone marker planned to cut production of its iPhone 13. read more
Delta Air Lines Inc (DAL.N) warned of a pre-tax loss for the fourth quarter due to a sharp rise in fuel prices, causing its shares to fall 5.1%.
Chipmaker Qualcomm Inc (QCOM.O) gained 1.7% on a new $ 10 billion share buyback plan. Read more
Rising issues outnumbered declines by a 1.29-to-1 ratio on the NYSE and by a 1.09-to-1 ratio on the Nasdaq.
The S&P Index recorded five new 52-week highs and eight new lows, while the Nasdaq recorded 40 new highs and 37 new lows.
Reporting by Devik Jain and Bansari Mayur Kamdar in Bengaluru; Editing by Arun Koyyur
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