S&P 500 Finishes Lower for the Fifth Day in a Row

What you need to know…

Earlier this morning, stocks were moderately lower, with the S&P 500 dropping to a 23-month low and the Nasdaq 100 falling to a 2-year low.  Weakness in semiconductor stocks for a second day was weighing on the overall market on negative carry-over from last Friday when the U.S imposed fresh curbs on China's access to American semiconductor technology. 

The S&P 500 Index ($SPX) (SPY) rebounded off these lows but finished the day -0.65%. This is the fifth day in a row the S&P 500 has closed lower.  The Dow Jones Industrials Index ($DOWI) (DIA) finished up +0.12%, and the Nasdaq 100 Index ($IUXX) (QQQ) was lower by -1.1%. 

Meta Platforms (META) slid -3.92% after Atlantic Equities downgraded the stock to neutral from overweight and we saw a -3.99% fall in Qualcomm (QCOM) after KeyBanc Capital Markets cut its price target on the stock to $170 from $220.

This morning the International Monetary Fund (IMF) cut its 2023 world GDP estimate to 2.7% from a previous estimate of 2.9% and warned that "the worst is yet to come."

Today’s stock movers…

Chip stocks are falling for a second day on negative carry-over from last Friday when the U.S. Commerce Department imposed fresh curbs on China's access to U.S. semiconductor technology, adding concerns to a sector faced with slumping demand.  Marvel Technology (MRVL) and KLA Corp (KLAC) are down more than -4%.  Also, Microchip Technology (MCHP), ASML Holding (ASML), NXP Semiconductors NV (NXPI), Applied Materials (AMAT), and Lam Research (LRCX) are down more than -3%.

U.S.-listed Macau casino operators are falling today on disappointing China holiday spending after tourism revenue for Macau casinos fell -26% to 287 billion yuan ($40.3 billion) over the Golden Week holiday from a year ago.  Wynn Resorts (WYNN) is down more than -8% to lead losers in the S&P 500.  Also, Las Vegas Sands (LVS) is down more than -8%, and MGM Resorts International (MGM) is down more than -4%.

Qualcomm (QCOM) is down more than -4% today after KeyBanc Capital Markets cut its price target on the stock to $170 from $220.

Meta Platforms (META) is down more than -4% today after Atlantic Equities downgraded the stock to neutral from overweight. 

Zscaler (ZS) is down more than -7% today to lead losers in the Nasdaq 100 after CEO Sinha announced that he would resign from the company effective October 21.

Zoom Video Communications (ZM) is down more than -3% today after Morgan Stanley downgraded the stock to equal weight from overweight.

Amgen (AMGN) is up more than +6% today to lead gainers in the S&P 500, Dow Jones Industrials, and Nasdaq 100 after Morgan Stanley upgraded the stock to overweight from equal weight.

Keurig Dr Pepper (KDP) is up more than +2% today after Wedbush initiated coverage of the stock with a recommendation of outperform and a price target of $43.

AmerisourceBergen (ABC) is up more than +2% today after Bank of America upgraded the stock to buy from neutral.

Viatris (VTRS) is up more than +4% today after Bloomberg reported the company is considering a potential sale of its consumer-health assets in Europe. 

Across the markets…

Dec 10-year T-notes (ZNZ22) today are up +9 ticks, and the 10-year T-note yield is up +4.9 bp at 3.931%.  The 10-year T-note yield today rose to a 1-1/2 week high of 4.005%.  Supply pressures are weighing on T-notes as the Treasury will auction $40 billion 3-year T-notes later today as part of this week’s $90 billion auctions of T-note and T-bonds.  Also, an increase in inflation expectations is helping to push T-note yields higher after the 10-year breakeven inflation rate today rose to a 1-week high of 2.338%.  T-notes recovered from their worst levels today on positive carry-over from a rally in European government bonds. 

The dollar index (DXY00) this morning is up by +0.03% at a 1-1/2 week high.  Higher T-note yields this morning are supporting modest gains in the dollar. Also, the weakness in stocks today has boosted liquidity demand for the dollar.

EUR/USD (^EURUSD) today is up by +0.06% and recovered from a 1-1/2 week low.  Hawkish comments today from ECB chief economist Lane gave the euro a boost, as well as today’s economic news that showed an unexpected increase in Italy’s Aug industrial production. 

ECB chief economist Lane said the ECB "is fully aware that further ground needs to be covered in the next several meetings to exit from the prevailing highly accommodative level of policy rates."

Italy Aug industrial production unexpectedly rose +2.3% m/m, stronger than expectations of a -0.1% m/m decline and the largest increase in 6 months.

USD/JPY (^USDJPY) today is up +0.01% and posted a 2-1/2 week high. Higher T-note yields today are undercutting the yen.  Also, weaker-than-expected economic news today weighed in the yen after the Japan Sep eco watchers outlook survey unexpectedly fell.  The yen dropped today to 145.86, just above the 145.90 level where Japan had intervened previously in the currency market to support the yen.

The Japan Sep eco watchers outlook survey unexpectedly fell -0.2 to 49.2, weaker than expectations of an increase to 50.8.

December gold (GCZ2) is up +2.6 (+0.16%), and December silver (SIZ22) is down -0.155 (-0.79%).  Precious metals this morning are mixed, with silver falling to a 1-week low.  Gold is slightly higher this morning after the dollar index gave up most of an early advance and is little changed.  Also, a fall in the S&P 500 today to a 23-month low has boosted some safe-haven buying of gold.  Higher T-note yields today are undercutting metals prices.  Gold prices continue to be undercut by fund liquidation as long positions in gold ETF’s dropped to a new 2-1/4 year low Monday. 

More Stock Market News from Barchart

• Markets Today: Stocks Under Pressure From Weak Energy Stocks and Higher Bond Yields
• Bearish Traders Target Citigroup (C) But Should Retail Investors Follow Along?
• 10 Stocks With High Implied Volatility Percentile
• Pre-Market Brief: Stocks Retreat as Global Growth Concerns Persist