Bloomberg
Published Oct 24, 2018 14:10
Updated Oct 24, 2018 15:17
Stock Rout Deepens; Nasdaq Flirts With Correction: Markets Wrap
(Bloomberg) -- The sell-off in U.S. stocks picked up steam as mixed corporate earnings and weak housing data fueled anxiety that rising prices will crimp economic growth. Treasuries rallied for a second day on demand for haven assets.
The S&P 500 Index extended its October rout to 7.4 percent, reducing this year’s gain for the benchmark index to less than 1 percent. Disappointing earnings from AT&T (NYSE:T) and Texas Instruments (NASDAQ:TXN) drove declines in the communications and semiconductor groups, offsetting a promising outlook from Boeing (NYSE:BA). The Dow Jones Industrial Average fell almost 300 points, and the Nasdaq Composite Index flirted with a correction from it’s record closing high in August.
Amid the flood of earnings that will bring reports from Microsoft (NASDAQ:MSFT) later Wednesday and Alphabet (NASDAQ:GOOGL), Intel (NASDAQ:INTC) and Amazon.com (NASDAQ:AMZN) on Thursday, economic data continues to underwhelm, particularly on the rate-sensitive housing front. New home sales sank again, sending battered homebuilders lower. Fragile market sentiment is also working through reports that potential bombs were sent to two former U.S. presidents and the New York headquarters of CNN.
“There’s just right now a heightened sensitivity to what can go wrong,” Kate Warne, investment strategist at Edward D. Jones & Co., said in an interview at Bloomberg’s New York headquarters. “So we will have more of these days where stocks move a lot within the day as everyone’s trying to sort through what do today’s reports mean.”
European politics is also in focus, with Italian Prime Minister Giuseppe Conte doubling down on his government’s budget and U.K. Prime Minister Theresa May’s cabinet descending into conflict. The pound weakened, and the region’s bonds rallied. The euro dropped following disappointing manufacturing data. Retailers were the biggest winners in the Stoxx Europe 600 Index. A turnaround in China’s markets helped the MSCI Asia Pacific Index avoid a bear market even as it edged down.
“Right now markets are still trying to reprice,” said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance. “What’s happening with earnings is exaggerating market moves.”
Elsewhere, oil rebounded after touching the lowest in almost two-months on a pledge by Saudi Arabia to meet any shortfall that materializes from Iranian sanctions. Emerging-market currencies and shares were mostly lower.
Terminal readers can read more in our Markets Live blog.
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Written By: Bloomberg
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