Stocks fell at the open on Tuesday after retail sales data beat expectations and the earnings season picked up steam.
The Dow Jones Industrial Average (^DJI) fell 0.4%, or roughly 130 points, to end Monday with gains. Contracts for the benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq 100 (^NDX) fell 0.8% and 1.1%, respectively.
Retail sales rose 0.7% in September from the previous month, more than twice as much Wall Street’s estimates for 0.3% growth, the latest data out on Tuesday showed. Despite predictions of a recession, the surprising reading reflects the continued resilience of US consumers.
In earnings, Bank of America ( PAC ) reported a 10% rise in profit, echoing last week’s strong showing by peers. Goldman Sachs ( GS ) was another highlight in Tuesday’s third-quarter reports Lockheed Martin ( LMT ), Johnson & Johnson ( JNJ ), and United Airlines ( UAL ) are also on the docket.
Earnings season is still in its early days, but there are already encouraging signs that corporate America will end the recent earnings slump. Tesla ( DSLA ) and Netflix ( NFLX ) report technology sector results on Wednesday, giving more insight into the numbers taken from higher borrowing costs.
Also read: What the central bank’s rate hike suspension means for bank accounts, CDs, loans and credit cards
Meanwhile, the Middle East conflict is still weighing on the market as investors assess the chances of it erupting into a wider war. The Rising geopolitical tensions in the Middle East Leading investors have warned of a global recession.
News that President Joe Biden plans to visit Israel on Wednesday and then Jordan has eased some of the concerns fueled by an Israeli ground attack on Gaza, seen as a red line for its Arab neighbors.
Oil prices steadied as the U.S. stepped up its diplomatic efforts and hopes rose that the U.S. would ease sanctions on producer Venezuela. Crude oil futures (CL=F) held above $86 a barrel, while Brent crude futures (BZ=F) traded near $90 a barrel.
Stocks open lower
Stocks fell on Tuesday as the Dow Jones Industrial Average (^DJI) shed 0.4%, or roughly 130 points, after a rally to start the trading week on Monday. The benchmark S&P 500 (^GSPC) fell about 0.8%, while tech-heavy Nasdaq 100 (^NDX) contracts fell more than 1%.
A consumer slowdown was nowhere to be seen in September
The US consumer surprises Wall Street.
New Commerce Department data released Monday showed retail sales rose 0.7% in September from the previous month, more than double Wall Street’s estimate of a 0.3% growth. Sales excluding autos and gas rose 0.6%, beating estimates for a 0.1% increase compiled by Bloomberg. Meanwhile, August sales were revised up to 0.8% from a previously reported 0.6% increase.
September reportThe economic data provided a snapshot of consumer spending at a time when economic data came in stronger than expected despite the Federal Reserve’s interest rate hike campaign as the central bank seeks to curb inflation.
Nine of the 13 categories highlighted in the publication increased from a month ago, while sporting goods was the only category unchanged from August. Sales at other store retailers led all categories, up 3% from August. Sales at non-store retailers rose 1.1%, while sales at motor vehicle and parts retailers rose 1% from September.
Electronics & Appliance Stores and Apparel sales were down 0.8% from the previous month.
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Stocks popular in premarket trading: BofA, Lockheed and Wyndham
Here are some of the leading stocks on Yahoo Finance’s Trending Tickers page in premarket trading on Tuesday:
Bank of America Corporation (PAC): Bank of America shares rose 1% in premarket. Yahoo Finance’s David Hollerith reported that the second-biggest U.S. bank saw its profit rise 10% after getting a boost from higher interest income and a strong performance from its Wall Street unit.
Lockheed Martin (LMT): Shares fell more than 1% in premarket trading on Tuesday. The group posted higher third-quarter earnings on Tuesday as geopolitical tensions fueled demand for its military equipment.
Wyndham (WH): Wyndham shares rose 12%. Choice Hotels said Tuesday it has offered to buy Wyndham Hotels in a $10 billion deal.
ERIC: Shares fell more than 4% after the company reported lower earnings and uncertainty affecting its mobile networks business is expected to last through 2024.
Stock futures fall as earnings season picks up pace
Major Wall Street stock gauges edged lower on Tuesday as reports from Bank of America and Johnson & Johnson got the week’s earnings flow.
Dow Jones Industrial Average (^DJI) futures were down 0.18%, or 61 points, while S&P 500 (^GSPC) futures were down 0.23%. Tech-heavy Nasdaq 100 (^NDX) contracts were 0.27% lower.
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