Stock Market News for October 22, 2024

Wall Street ended lower on Monday, primarily affected by a decline in real estate stocks. Treasury yields rose to their highest levels in several months as investors reacted to remarks by Federal Reserve officials. Out of the three major stock indexes, two closed in the negative, while one managed to finish in the positive.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) dipped by 344.31 points, which is a decrease of 0.8%, closing at 42,931.60. Out of the 30 components in this index, 23 ended the day with losses, while only seven saw gains.

Meanwhile, the tech-heavy Nasdaq Composite climbed by 50.45 points, or 0.3%, closing at 18,540.01.

The S&P 500, however, fell by 10.69 points, a decline of 0.2%, to finish at 5,853.98. A majority of the sectors in this index, specifically ten out of eleven, saw red figures. The Real Estate Select Sector SPDR (XLRE) declined by 2.1%, the Health Care Select Sector SPDR (XLV) dropped by 1.2%, and the Consumer Staples Select Sector SPDR (XLP) fell by 0.8%. Conversely, the Technology Select Sector SPDR (XLK) experienced a rise of 0.5%.

The CBOE Volatility Index (VIX), which measures market fear, increased by 1.9%, closing at 18.37. On Monday, a total of 11.4 billion shares were exchanged, which is slightly lower than the 20-session average of 11.6 billion. The number of declining stocks outpaced advancing ones on the NYSE by a 3.51-to-1 ratio, while the Nasdaq Composite reported 89 new highs and 51 new lows.

Treasury Yields Rise on Comments From Fed Officials

Amid discussions about the economy's resilience and a robust labor market, Minneapolis Fed President Neel Kashkari indicated that the long-term direction for interest rates could potentially be higher than in the past, despite current reductions. Dallas Fed President Lorie Logan supported the current trend toward lower interest rates, while cautioning that unexpected events could impact the pace of changes and the final levels of rates. She emphasized the need for the Federal Open Market Committee (FOMC) to remain adaptable and responsive to market conditions.

Responding to these comments, the yield on the benchmark 10-year treasury surged by 12 basis points to 4.194%, marking its highest level in nearly three months. The yield on 2-year treasuries increased by 7 basis points to 4.027%.

Higher interest rate prospects typically lead to heightened bond yields and can negatively impact technology stocks due to concerns over future valuations. However, on this particular day, the technology sector was buoyed by a significant 4.1% rise in shares of NVIDIA Corporation. In contrast, most other sectors faced losses, particularly real estate and health care.

Consequently, stocks belonging to CBRE Group, Inc. fell by 1.7%, while Prologis, Inc. saw a sharper decline of 3.9%. Both of these companies hold a Zacks Rank of #3 (Hold).

Economic Data

The Conference Board reported that the leading economic indicators for the United States declined by 0.5% in September 2024, culminating in a total of 99.7, following a smaller drop of 0.3% in August. Over the six-month period from March to September 2024, the index dropped by 2.6%, a steeper decline compared to the previous six months when it had fallen by 2.2%.

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