Stock market today: tech stocks fall as U.S. political pressures weigh in

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Investors received another update on the China Evergrande saga on Monday.

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The stock market was down again on Monday, without much bad news. After a difficult September, several risks remain for the markets in October, which can also be a historically bad month for stocks.

In the morning exchanges, the


Dow Jones Industrial Average

was down 418 points, or 1.2%, after the index rose 482 points on Friday to close at 34,326.


S&P 500

and the


Nasdaq Composite

fell by 1.5% and 2.2% respectively.

Technology stocks were particularly hard hit by the rise in bond yields. Rising yields often mean that investors expect inflation and strong economic demand in the future. The 10-year Treasury yield climbed to 1.5% from 1.48%.

Other areas of the market were not declining as much. The


Equal Weight Invesco S&P 500

Exchange Traded Funds (RSPs), which weight each holding in the index equally and reflect the size of stocks on the rise or fall, fell only 0.7%.

In general, the risks still have not gone away. Supply chain constraints prevent some companies from meeting their sales targets, while the associated higher costs weigh on profit margins. Higher corporate taxes could be on the way. Additionally, bond yields should continue to rise, making future earnings less valuable.

As for the S&P 500, October can be a tough month, especially after a tough September. When the index drops in September, the S&P 500 is only up 54% from October historically, according to Bank of America, with an average decline of 0.4%. The bank said October was also one of the most volatile months.

Meanwhile, the S&P 500 is down just over 5% from its all-time high of September 2. Technically, a correction is a decrease of 10%. “I don’t think we’ve seen the bottom in equities yet,” wrote Jay Pestrichelli, CEO of ZEGA Financial. “While September’s stock declines were uncomfortable, they were a far cry from a traditional 10% market correction.”

The S&P 500 fell below the 4,300 level on Monday, a somewhat troubling sign. Buyers had stepped in last month when the index was slightly above that level, but a sharp move below could mean the index is poised to drop to 4,220, which would mark a 7% drop from at the highest historical index.

Analysts also noted that the December deadline for the US debt ceiling and the lingering political conflict over the $ 1 trillion infrastructure bill and $ 3.5 trillion reconciliation plan had muddied the waters.

More: Democrats Still Negotiating $ 3.5 Trillion Reconciliation Bill

Overseas, Hong Kong


Hang Seng Index

fell 2.2% as mainland Chinese markets were closed for holidays. The pan-European


Stoxx 600

was down 0.3%.

Hong Kong rocked as shares of heavily indebted real estate developer


China Evergrande

(ticker: 3333.HK) were suspended “pending publication by the Company of an announcement containing inside information on a major transaction”. Reports have circulated in Chinese state media that a rival,


Hopson development
,

would buy a major Evergrande unit. Trading in the Hopson share (0754.HK) has also been halted.

Read also : The stock market has cast aside Evergrande’s concerns in China. Why this is a mistake.

Oil prices were little moved in the run-up to an OPEC + move, with US crude futures hovering around $ 78 a barrel.

Here are nine actions in motion on Monday:


Moderna

(MRNA) and


Novavax

(NVAX) saw their shares fall 5.6% and 3.1%, respectively, after the announcement that


Johnson & johnson

(JNJ) is seeking approval from the Food and Drug Administration for its Covid-19 booster injection. Also,


Merck

(MRK) said on Friday that his oral treatment for Covid-19 was effective in reducing the risk of hospitalization. Merck stock rose 2%.


Therapeutic sage

(SAGE) and


Biogen

(BIIB) saw its shares fall 1.7% and 0.9%, respectively, even after companies announced the effectiveness of a new treatment for depression.


You’re here

(TSLA) rose 2.1% after the electric vehicle group announced a record quarter on Saturday with shipments up 70% from a year ago.


Akamai Technologies

The stock (AKAM) fell 1.8% after being downgraded to the sector weighting from the overweight in KeyBanc Capital Markets.


From the Pont de Nemours

(DD) stock gained 1.3% after being overweight Neutral at JPMorgan.

Adidas slipped 2.6% (ADS.Germany), after the sportswear giant’s shares were lowered to Underperform by Bank of America.

Write to Jacob Sonenshine at [email protected]

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