US equity indexes displayed a mixed performance in response to elevated geopolitical risks following Israel's air strikes on central Beirut, Lebanon's capital. These developments come amidst a backdrop of a resilient US services sector that continues to show expansion. The Nasdaq Composite saw a slight increase of 0.1%, reaching 17,943.1, as midday trading approached on Thursday.
In contrast, the S&P 500 experienced a minor decline of less than 0.1%, ending the day at 5,705.3, while the Dow Jones Industrial Average posted a more significant drop of 0.3%, settling at 42,061.2. The sectors of technology and energy managed to gain traction during the day, yet consumer discretionary emerged as the leading decliner among industry sectors. In the commodities market, West Texas Intermediate crude oil demonstrated robust growth, surging by 4.5% to hit $73.23 per barrel. As tensions escalate in the Middle East, Israel's military actions against Beirut are compounding fears of further conflict, particularly as Hezbollah reportedly waged attacks against Israeli forces.
The situation remains precarious with unanswered questions about Israel's potential response to Iranian missile strikes, which could include a retaliatory assault on Israel's oil infrastructure. Turning to economic indicators, the Institute for Supply Management reported that the US services index rose to 54.9 in September, a notable increase from 51.5 in August.
This reading, which surpassed the 51.7 expected in a recent Bloomberg survey, reflects continued progress in the services sector. Conversely, the S&P Global US services index was revised downward to 55.2 for September, down from its initial flash reading of 55.4, aligning with expectations of no revisions.
Although this index dipped from the 55.7 recorded in August, it maintains its position in expansionary territory, being well above the 50 mark. In the labor market, initial claims for US unemployment assistance saw an uptick to 225,000 for the week ending September 28, compared to an upward revision to 219,000 from the previous week.
This number was slightly above the consensus estimate of 221,000 from the Bloomberg survey. However, the four-week moving average showed a decrease of 750, landing at 224,250, marking a third consecutive decline and the seventh reduction in the past eight weeks. On the treasury market front, most US Treasury yields have trended upward intraday, with the 10-year yield increasing by 4.4 basis points to 3.83%.
Simultaneously, the two-year rate rose by 5.6 basis points to 3.69%. In corporate developments, Guggenheim has revised its price target for Warner Bros. Discovery ($WBD), lowering it to $9 from $12, while still maintaining a buy rating on the stock. Consequently, shares of Warner Bros. dropped 3.5% intraday, placing the company among the poorest performers on both the S&P 500 and Nasdaq indices. RBC Capital Markets took a bullish stance on Constellation Energy ($CEG), raising its price target to $272 from a previous $214, while continuing to endorse the stock with a sector-perform rating.
Shares for Constellation Energy climbed 4.9% intraday, distinguishing itself as one of the leading performers on the S&P 500..