October 21, 2024

Wall Street stocks were subdued to start out the new week as higher yields and anticipation of top-tier earnings reports led to some profit-taking for the broader market. The yield on the 2-year Treasury note was up to 4.032% while the benchmark 10-year yield settled at 4.196%, which added pressure to rate-sensitive stocks. The major averages managed to improve off session lows in the afternoon hours and finished the day mixed, with the NASDAQ eking out a modest gain. Rate sensitive sectors were the biggest losers, led by underperformance from Real Estate (XLRE), Health Care (XLV), Consumer Staples (XLP) and Financial (XLF). With Nvidia (NVDA) and Apple (AAPL) surging to fresh new highs, Technology (XLK) was the only sector to post positive for the session. The DJIA fell by 344.31 points (-0.80%) and settled at 42931.60. The S&P 500 was lower 10.69 points (-0.18%) and finished at 5853.98. The NASDAQ managed to add 50.45 points (0.27%) to close at 18540.00. 

Breadth was mostly negative with declining issues beating advancing issues by 4:1 on the NYSE and by 5:2 on the NASDAQ. Declining volume was 72% on the NYSE but advancing volume was 61% on the NASDAQ. VIX finished higher by 0.35 points (+1.94%) and settled at 18.38. Crude oil gained $1.16 (1.68%), as the November contract closed at $70.38 a barrel. Gold finished at another fresh new high, gaining $4.80 (0.18%) and finished at $2734.80 an ounce. Bitcoin (BTC) closed the session at $67,618.82. 

Investors were cautious today following six consecutive weeks of gains by the major averages and steep valuations. Key secondary indexes such as the small cap Russell 2000 and DJ Transportation were the biggest percentage decliners during today's session. In addition, the closely watched Philadelphia Semiconductor Index (SOX) is sporting a bearish MACD crossover and continues to trade around key support level, at its 100-day MA. This week is all about the 114 S&P 500 companies that are due to report earnings results this week. However, with geopolitical tensions remaining elevated and upcoming US elections coming to the surface, the broader market could be in a holding pattern for a few weeks. 

Earnings releases to watch on Tuesday include: Danaher (DHR), Fiserv (FI), GE Aerospace (GE), Philip Morris International (PM), RTX Corporation (RTX), Texas Instruments (TXN) and Verizon (VZ).  

Tuesday's Market Moving Economic Calendar: Richmond Fed Manufacturing and Patrick Harker Speaks. 

By Richard Cuvilly