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Stocks close lower amid disappointing earnings reactions
14-Oct-20 16:25 ET
Dow -165.81 at 28513.94, Nasdaq -95.17 at 11768.66, S&P -23.26 at 3488.67

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 lost 0.7% on Wednesday for its second straight decline, as the market appeared influenced by disappointing earnings reactions and some consolidation activity. The Nasdaq Composite declined 0.8%, the Dow Jones Industrial Average declined 0.6%, and the Russell 2000 declined 0.9%.

Shares of UnitedHealth (UNH 321.85, -9.57, -2.9%), Bank of America (BAC 23.62, -1.33, -5.3%), and Wells Fargo (WFC 23.25, -1.49, -6.0%) fell between 3-6% despite the companies reporting mixed-to-positive earnings results. Goldman Sachs (GS 211.23, +0.42, +0.2%) was little changed despite reporting blowout quarterly results.

BAC and WFC contributed to the underperformance of the financials sector (-1.1%), which joined the consumer discretionary (-1.4%), communication services (-1.2%), and real estate (-1.2%) sectors as today's laggards. The industrials (+0.5%), materials (+0.4%), and energy (+0.3%) sectors closed higher.

Some attributed today's decline in part to Treasury Secretary Mnuchin expressing some doubt about a stimulus package before the election, and France announcing night-time restrictions to curb a "second wave" of coronavirus in the region.

The market might not have been so distraught by these latter developments since several cyclical sectors did finish in positive territory. The energy space particularly benefited from higher oil prices ($41.02, +0.83, +2.1%) and M&A speculation surrounding Concho Resources (CXO 48.66, +4.52, +10.2%).

Therefore, it's reasonable to think that the market needed to find reasons to cool down from a hot start to the month, including the rally on Monday.

U.S. Treasuries finished with small gains amid the decline in equities and cautious-minded economic commentary from Goldman Sachs. The 2-yr yield declined two basis points to 0.13%, and the 10-yr yield declined one basis point to 0.72%. The U.S. Dollar Index decreased 0.2% to 93.38.

Reviewing Wednesday's economic data:

The Producer Price Index for final demand increased 0.4% m/m (Briefing.com consensus +0.1%) while the index for final demand, less food and energy, also increased 0.4% (Briefing.com consensus +0.3%).
The key takeaway from the report is that the monthly surprises were tempered by the absence of any nettlesome inflation pressure on a year-over-year basis. The index for final demand was up just 0.4% yr/yr while the index for final demand, less food and energy, was up 1.2%.
The weekly MBA Mortgage Applications Index decreased 0.7% following a 4.6% increase in the prior week.

Looking ahead to Thursday, investors will receive the weekly Initial and Continuing Claims report, the Philadelphia Fed Index for October, the Empire State Manufacturing Index for October, Import and Export Prices for September, and possibly the Treasury Budget for September, which has been delayed for fiscal year end reconciliation.

Nasdaq Composite +31.2% YTD
S&P 500 +8.0% YTD
Dow Jones Industrial Average -0.1% YTD
Russell 2000 -2.8% YTD

Market Snapshot
Dow 28513.94 -165.81 (-0.58%)
Nasdaq 11768.66 -95.17 (-0.80%)
SP 500 3488.67 -23.26 (-0.66%)
10-yr Note +22/32 0.728
NYSE Adv 1165 Dec 1825 Vol 764.4.1 mln
Nasdaq Adv 1139 Dec 2192 Vol 3.4 bln

Industry Watch
Strong: Energy, Industrials, Materials
Weak: Consumer Discretionary, Information Technology, Communication Services

Moving the Market

-- Stock market trades lower, consolidates recent gains

-- Underwhelming earnings reactions

-- Stimulus talks drag on

-- Cyclical sectors outperform

WTI crude futures gain 2%, energy stocks outperform
14-Oct-20 15:25 ET
Dow -106.10 at 28573.65, Nasdaq -70.82 at 11793.01, S&P -16.45 at 3495.48

[BRIEFING.COM] The S&P 500 is down 0.5% to trade well off session lows (-0.9%). The Russell 2000 is also down 0.5%.

One last look at the sector performances shows eight trading lower and three trading higher. Consumer discretionary (-1.1%) and communication services (-1.0%) are down at least 1.0%, while the industrials (+1.0%), energy (+0.6%), and materials (+0.6%) sectors sport decent gains on this down index day.

WTI crude futures settled higher by 2.1%, or $0.83, to $41.02/bbl.