Market news
Wall Street closed lower on Wednesday as investors weighed in on economic data and awaited another interest rate cut from the Federal Reserve. Market participants also assessed third-quarter earnings results. The Nasdaq, Dow and S&P 500 indexes closed in negative territory.
How did the tests perform?
The Dow Jones Industrial Average (DJI) fell 0.2%, or 91.51 points, to close at 42,141.54. Eighteen components of the 30-stock index ended in negative territory, and 12 ended in positive territory.
The tech-heavy Nasdaq Composite index fell 104.82 points, or 0.6%, to 18,607.93.
The S&P 500 lost 0.3%, or 19.25 points, to close at 5,813.67. Eight broad sectors of the benchmark index closed in the green, while three closed in the red. The Technology SPDR (XLK), Utilities SPDR (XLU) and Healthcare SPDR (XLV) fell 1.6%, 0.2% and 0.2%, respectively.
The CBOE Volatility Index (VIX) rose 5.2% to 20.35. The S&P 500 set 24 new 52-week highs and five new lows; The Nasdaq Composite Index recorded 126 new highs and 98 new lows.
The US economy is showing strong growth along with significant job growth
The US economy grew at a rate of 2.8% in the third quarter, according to a Commerce Department report released on Wednesday. This growth rate was slightly below the consensus estimate of 3.1% and followed a 3% increase in the previous quarter. Consumer spending, the driver of U.S. economic activity, rose 3.7% in the third quarter, the highest since early 2023 and a significant contributor to GDP growth.
In addition to the GDP data, the labor market showed strength in October, with the U.S. private sector adding 233,000 jobs, well above September’s revised total of 159,000 and above expectations of 113,000, according to ADP data. This is the highest level of job creation since July 2023.
The upcoming Federal Reserve meeting on November 7 is expected to lead to another rate cut as the central bank continues to focus on boosting growth despite slowing inflation trends.
Third quarter earnings highlights
Alphabet Inc. GOOGL reported third-quarter 2024 adjusted earnings of $2.12 per share, beating the Zacks Consensus Estimate of $1.83 per share. The technology holding company had total revenue of $74.55 billion, beating the Zacks Consensus Estimate by 2.34%.
Garmin Ltd. GRMN reported third-quarter 2024 adjusted earnings of $1.99 per share, beating the Zacks Consensus Estimate of $1.46 per share. The wireless company posted total revenues of $1.59 billion, beating the Zacks Consensus Estimate by 9.81%.
snap inc. SNAP reported third-quarter 2024 adjusted earnings of $0.08 per share, beating the Zacks Consensus Estimate of $0.05 per share. The technology company posted total revenue of $1.37 billion, beating the Zacks Consensus Estimate by 1.36%.
As a result, the share price of Alphabet, Garmin and Snap rose by 2.8%, 23.3% and 15.9%, respectively. Alphabet currently has a Zacks Rank #2 (Buy). You can see See the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic data
Pending home sales rose 7.4% in September, according to the National Association of Realtors. The figure for August remained unchanged at an unrevised increase of 0.6%.
For the week ended October 25, U.S. commercial crude oil inventories (excluding Strategic Petroleum Reserve stocks) fell by 0.5 million barrels compared to the previous week.
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