US benchmark equity indexes faced downward pressure on Wednesday as traders meticulously evaluated the latest corporate earnings reports alongside crucial economic data. The Nasdaq Composite witnessed a notable drop of 1.6%, settling at 18,276.7, while the Dow Jones Industrial Average decreased by 1%, closing at 42,515.
The S&P 500 index followed suit, declining by 0.9% to finish at 5,797.4. Among various sectors, consumer discretionary and technology industries experienced the most significant declines. In contrast, only the real estate and utilities sectors managed to close higher during the trading session. In the realm of company news, Enphase Energy ($ENPH) stock plummeted nearly 15%, marking it as the worst performer on the S&P 500 for the day.
The company's Q3 financial results released late Tuesday fell short of Wall Street's expectations, triggering a wave of rating downgrades from several analysts. CoStar Group ($CSGP) shares also saw a considerable decrease of 5.3%, placing it among the worst performers on both the S&P 500 and Nasdaq.
The company reported Q3 revenues that failed to meet market expectations late Tuesday. Meanwhile, McDonald's ($MCD) faced its own challenges, recording the steepest decline on the Dow, with a 5.1% drop, and being one of the top decliners on the S&P 500. US health authorities announced an investigation into an E.
coli outbreak in several states, which is linked to the fast-food giant's Quarter Pounder burgers, adding to the company's troubles. On a more positive note, Teledyne Technologies ($TDY) emerged as the second-best performer on the S&P 500, increasing by 6% after surpassing expectations in their Q3 results. AT&T ($T) surprised investors with an unexpected quarterly revenue decline, attributed to challenges in their business wireline segment which resulted in a multi-billion dollar write-down.
Despite these challenges, AT&T’s shares rose by 4.6%, ranking among the top gainers on the S&P 500. In bond market movements, the US 10-year yield rose by 3.2 basis points to 4.24%, while the two-year rate increased by 4.1 basis points to 4.08%. On the economic front, the latest Beige Book report indicated that economic activity remained "little changed" across almost all Federal Reserve districts since early September; however, the long-term outlook showed a slight uptick in optimism.
Notably, manufacturing activity declined in most districts based on the report, which was compiled with information gathered by October 11. September saw a surprising drop in US existing home sales, yet indicators traditionally linked to higher sales are starting to emerge, according to data from the National Association of Realtors (NAR).
NAR's Chief Economist Lawrence Yun stated, "There are more inventory choices for consumers, lower mortgage rates than a year ago, and continued job additions to the economy." Mortgage application volume in the US fell for the fourth consecutive week, reaching its lowest level since July amidst diminishing purchase and refinancing activities, as reported by the Mortgage Bankers Association. In commodity markets, West Texas Intermediate crude oil prices decreased by 1.1% to $70.98 per barrel.
Furthermore, commercial crude stockpiles within the US surged by 5.5 million barrels to reach 426 million barrels during the week ending Friday, a significant increase compared to the consensus estimate of a million-barrel gain, according to the Energy Information Administration. Gold prices fell by 1.1% to $2,730.10 per troy ounce, with silver dropping 3.4% to $33.85 per ounce.
The fluctuations in commodities are reflective of broader market sentiments and economic indicators. This dynamic interplay of economic factors and corporate performance sets the stage for future movements in the stock market and the economy at large..