Stock Market News for Oct 28, 2021

·4 min read

The Dow and the S&P 500 ended their winning streak to finish lower on Wednesday, while the Nasdaq ended little changed, as investors digested a slew of earnings from some of the tech giants. Also, U.S. Treasury yields pulled back, which weighed on cyclical stocks.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) declined 0.7% or 266.19 points to finish at 35,490.69 points, ending its three-day winning streak.

The S&P 500 fell 0.5% or 23.11 points to end at 4,551.68 points, also to end its three-day winning streak.

Energy, financials and materials stocks were the worst performers. The Energy Select Sector SPDR (XLE) declined 2.9%, while the Financials Select Sector SPDR (XLF) and Materials Select Sector SPDR (XLB) dropped 1.7% and 1.4%, respectively. Ten of the 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq gained less than a point to end flat at 15,235.84 points despite shares of Microsoft Corporation MSFT and Alphabet, Inc. GOOGL rallying following the announcement of their quarterly results. Shares of Microsoft and Alphabet gained 4.2% and 5%, respectively. Microsoft has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was up 6.26% to 16.98. A total of 11.74 billion shares were traded on Wednesday, higher than the last 20-session average of 10.43 billion. Decliners outnumbered advancers on the NYSE by a 2.43-to-1 ratio. On Nasdaq, a 2.29-to-1 ratio favored declining issues.

Markets Fall Despite Robust Earnings

Stocks declined on Wednesday after registering record closes earlier in the week as robust earnings reports from some of the biggest American corporations gave investors’ confidence a boost. So far, it has been a great earnings season that has seen stocks rally, which has taken the S&P 500 up by almost 6% so far this month, with only two days of trading left in October.

So far around 38% companies from the S&P 500 component have reported quarterly results, of which 83% have surpassed analysts’ expectations.

Among the big companies that released earnings reports on Wednesday, The Boeing Company BA reported an adjusted loss of $0.60 per share for third-quarter 2021, wider than the Zacks Consensus Estimate of a loss of $0.17 per share. Its shares fell 1.5%.

Also, General Motors Company’s GM shares fell 5.4% after the company reported third-quarter 2021 revenues of $26,779 million, missing the Zacks Consensus Estimate of $31,167 million.

On Wednesday, the Bank of Canada came up with a surprise announcement that it would end its bond-buying program and warned of inflation through 2023. It also hinted at rising interest rates as soon as in the second quarter of 2022. This somewhat raised worried in the minds of investors, thus weighing on stocks.

Treasury Yields Pull Back

The 10-year U.S. Treasury Yields fell for the fourth day in a row, declining over 6 basis points to put it back on track for its biggest single-day decline since Aug 13. The decline in Treasury yields and a flattening yield curve helped growth names such as the consumer discretionary stocks in the S&P 500 index. However, it weighed on cyclical stocks like the financials dragged down the S&P 500 on Wednesday.

Economic Data

In economic data released on Wednesday, U.S. durable goods orders declined 0.4% in October. However, it was narrower than analysts’ expectations of a decline of 1%. Core orders increased 0.8%. The government also said that trade deficit widened in September.

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