Stock Market News for Oct 22, 2024

On Monday, Wall Street experienced a decline, primarily driven by a downturn in real estate stocks. Rising Treasury yields also influenced market sentiment as investors closely followed remarks from Federal Reserve officials.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell by 344.31 points, or 0.8%, finishing at 42,931.60. Out of the 30 companies in the index, 23 saw their share prices drop, while only 7 managed to gain.

Meanwhile, the tech-focused Nasdaq Composite managed to increase by 50.45 points, or 0.3%, concluding the day at 18,540.01.

The S&P 500 saw a decline as well, dropping by 10.69 points, or 0.2%, to finish at 5,853.98. Among its 11 sectors, 10 closed lower. Notably, the Real Estate Select Sector SPDR (XLRE), the Health Care Select Sector SPDR (XLV), and the Consumer Staples Select Sector SPDR (XLP) experienced losses of 2.1%, 1.2%, and 0.8%, respectively. In contrast, the Technology Select Sector SPDR (XLK) rose by 0.5%.

The volatility index, known as the CBOE Volatility Index (VIX), increased by 1.9%, settling at 18.37. In total, 11.4 billion shares were traded on Monday, slightly below the 20-session average of 11.6 billion. The number of declining stocks outpaced advancing shares by a ratio of 3.51-to-1 on the New York Stock Exchange (NYSE), while the Nasdaq Composite recorded 89 new highs and 51 new lows.

Treasury Yields Rise on Fed Comments

Federal Reserve officials made comments regarding the economy's resilience and a strong labor market. Minneapolis Fed President Neel Kashkari noted that the long-term direction of interest rates could be higher than previously seen, despite current decreases. Similarly, Dallas Fed President Lorie Logan expressed support for the ongoing reduction of interest rates. She cautioned, however, that external factors could affect the pace and targets of future policy adjustments, urging the FOMC to remain adaptable.

As a result of these comments, the yield on the 10-year Treasury note rose by 12 basis points (bps) to 4.194%, reaching its highest point in nearly three months. The 2-year Treasury yield also increased, moving up by 7 bps to 4.027%.

While rising interest rates typically have a negative impact on tech stocks due to future valuations, Monday proved to be an exception. The technology sector was bolstered by a 4.1% increase in shares of NVIDIA Corporation (NVDA). Other sectors, particularly real estate and health care, struggled.

This downturn negatively impacted firms like CBRE Group, Inc. (CBRE) and Prologis, Inc. (PLD), whose shares dropped by 1.7% and 3.9%, respectively, both of which currently have a Zacks Rank of #3 (Hold).

Economic Data

According to the Conference Board, leading economic indicators in the U.S. decreased by 0.5% in September 2024 to a figure of 99.7, following a decline of 0.3% in August. Over the six-month stretch from March to September 2024, this index fell by 2.6%, surpassing its previous six-month drop of 2.2% from September 2023 to March 2024.

WallStreet, RealEstate, Stocks