Wall Street dragged lower by Brexit news
22-Oct-19 16:20 ET
Dow -39.54 at 26788.10, Nasdaq -58.69 at 8104.30, S&P -10.73 at 2995.99
briefing.com
[BRIEFING.COM] The S&P 500 lost 0.4% on Tuesday in a news-heavy session. Company-specific news contributed to outsized stock moves, but overall gains in broader market had been nominal until a hiccup on the Brexit front dragged the major indices into negative territory. The benchmark index closed at session lows below the 3000 level.
The Dow Jones Industrial Average shed 0.2% amid mixed reactions to earnings results from Procter & Gamble (PG 122.18, +3.10, +2.6%), United Technologies (UTX 141.41, +3.06, +2.2%), McDonald's (MCD 199.27, -10.58, -5.0%), and Travelers (TRV 130.15, -11.76, -8.3%). The Nasdaq Composite lost 0.7%, while the Russell 2000 added 0.1%.
Regarding Brexit, UK lawmakers endorsed Prime Minister Boris Johnson's deal, but voted against a speedy timetable to approve Brexit legislation in the next three days. The news caused a knee-jerk reaction to the downside for equities, as it makes an extension request more likely and increases the uncertainty in the market.
The information technology sector (-1.4%) succumbed to broad-based selling and was today's laggard. The communication services sector (-0.9%) followed suit amid sizable losses in Facebook (FB 182.34, -7.42, -3.9%) and Netflix (NFLX 266.69, -11.36, -4.1%), while the energy sector (+1.3%) was today's leader amid a bounce in oil prices ($54.38, +$1.09, +2.4%).
Facebook was hit by news that it is now being probed by 47 attorney generals for possible antitrust violations. Netflix fell after Verizon (VZ 60.77, +0.02, unch) partnered with Walt Disney (DIS 132.40, +2.14, +1.6%) to provide its customers with free access to Disney+ for one year.
Biogen (BIIB 281.87, +58.36, +26.1%) was a notable story stock on Tuesday. Shares surged 26% after the company surprised investors by saying it will seek FDA approval for its Alzheimer's drug in 2020 after it had renounced the treatment in March. Biogen also beat top and bottom-line estimates.
Separately, shares of Lyft (LYFT 43.56, +2.68, +6.6%) and Uber (UBER 32.53, +1.12, +3.6%) reacted positively to comments from Lyft's co-founders that it could reach profitability (adjusted EBITDA) sooner than expected by the end of 2021.
U.S. Treasuries finished the session mixed. The 2-yr yield increased two basis points to 1.61%, and the 10-yr yield declined two basis points to 1.77%. The U.S. Dollar Index increased 0.2% to 97.47.
Friday's lone economic report was Existing Home Sales for September:
- Existing home sales decreased 2.2% month-over-month in September to a seasonally-adjusted annual rate of 5.38 million (Briefing.com consensus 5.52 mln) from a revised 5.50 million (from 5.49 million) in August. Total sales were 3.9% higher than the same period a year ago.
- The key takeaway from the report is that upward pressure on prices is likely to persist as inventory of unsold homes continues decreasing from last year's levels.
Looking ahead, investors will receive the FHFA Housing Price Index for August and the weekly MBA Mortgage Applications Index on Wednesday.
- Nasdaq Composite +22.1% YTD
- S&P 500 +19.5% YTD
- Russell 2000 +15.0% YTD
- Dow Jones Industrial Average +14.8% YTD
Market Snapshot
| Dow | 26788.10 | -39.54 | (-0.15%) | | Nasdaq | 8104.30 | -58.69 | (-0.72%) | | SP 500 | 2995.99 | -10.73 | (-0.36%) | | 10-yr Note | +3/32 | 1.770 |
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| | NYSE | Adv 1678 | Dec 1186 | Vol 752.3 mln | | Nasdaq | Adv 1452 | Dec 1601 | Vol 1.8 bln |
Industry Watch
| Strong: Energy, Industrials, Utilities |
| | Weak: Information Technology, Communication Services, Consumer Discretionary |
Moving the Market
-- Wall Street dragged lower by hiccup on Brexit front: lawmakers voted against speedy timetable to approve Brexit legislation
--Key corporate news contributed to sizable stock moves
-- Procter & Gamble (PG), United Technologies (UTX), and Biogen (BIIB) among notable gainers
-- McDonald's (MCD), Travelers (TRV), and Facebook (FB) among notable laggards
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