The Dow Jones Industrial Average finished 1% lower at the close Wednesday as higher Treasury yields spooked stocks. Meanwhile, the Federal Reserve said there was little change in the economy during the last six weeks.
Yields on the benchmark 10-year Treasury note finished the day at just past 4.9%, putting them at levels not seen since 2007. Not only did that impact the Dow, the S&P 500 sank 1.3% in the stock market today, and the Nasdaq plunged 1.6%. Both indexes have fallen below the 50-day line. Also, the small-cap Russell 2000 dropped more than 2% by session's end.
Volume on the New York Stock Exchange ticked lower while the Nasdaq was higher compared with Tuesday.
The Innovator IBD 50 ETF also had a bad day, falling 2%. Crude oil surged more than 2%, though, to trade at $87.28 a barrel.
The Federal Reserve's Beige Book report, released Wednesday, noted most Fed districts reported "little to no change" in economic activity since the last report on Sept. 6.
Consumer spending and manufacturing was mixed across 12 districts while the "near-term outlook for the economy was generally described as stable or having slightly weaker growth," the report said.
Dow Jones Stocks
Among Dow Jones stocks, Travelers gave back early gains and finished 0.8% lower after earnings. Strong underwriting and investment income were offset by catastrophic losses in the third quarter.
Proctor & Gamble climbed 2.6% but failed retake its 50-day moving average after fiscal first-quarter sales rose 6% from the year-ago quarter. Earnings showed 17% growth. PG was the biggest gainer but Walgreens, Caterpillar and tech giants weighed down the Dow.
Outside Dow Jones stocks, United Airlines gapped down despite topping sales and earnings views. The airline stock suffered several price target cuts as the ongoing crisis in the Middle East and fuel costs dimmed its current quarter outlook. Shares are in deep correction territory.
Among chip stocks, top lithography gear maker ASML fell on a dim sales outlook after an earnings and sales beat. The Dutch company is waiting for demand from top chip makers such as Dow Jones leader Intel and Taiwan Semiconductor to recover.
Also among chip stocks, KeyBanc initiated coverage of new issue Arm with an overweight rating and 65 price target. A recent initial public offering, ARM is in an IPO base with an entry at 69.
Warren Buffett's Berkshire Hathaway holding Ally Financial ended nearly 1% higher after third-quarter results. Higher funding costs drove net financing revenue down and were partially offset by loan growth and floating rate assets as well as revenue from insurance and banking.
Tesla Earnings
Tesla dived below the 50-day line during the trading day and rose in extended trading after third-quarter results. Margins shrank to 17.9%, from 25.1% a year earlier, Reuters reported. Revenue rose 9% to $23.35 billion, at the slowest pace in three years for the electric-vehicle giant. A handle buy point of 278.98 remains valid.
Also outside Dow Jones, Morgan Stanley recovered some of its steep losses after the investment banker reported a lackluster third quarter. Revenue from investment and wealth management rose. Shares were down more than 5%.
Nasdaq rebounded from its 50-day line in strong volume after third-quarter results. The stock listing and trading company's revenue declined 7%, but earnings grew to 71 cents a share from 68 cents a year ago.
Among IBD 50 stocks, energy plays continued to do well. Tidewater has rebounded from the 50-day line while Liberty Energy looks extended. Chord Energy is in a buy zone above a 167.81 entry. And International Seaways is nearing a handle entry of 48.40.
Meanwhile, Permian Resources tried to break out of a cup base with a buy point of 15.30. The relative strength line is at a new high for the company.
Housing starts surprised and rose in September to 1.358 million from August's revised 1.269 million. But the September figure still was below forecasts for 1.394 million, according to Econoday. Building permits came in above views of 1.450 million at 1.473 million, below August's revised 1.541 million.
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