Stocks Slide Ahead of Earnings Season Kick-off

Barry Adams
10 Oct, 2022
New York City

Stocks struggled ahead of the busy week of economic data and the kickoff of the earnings season. 

The dollar advanced for the fourth day in a row dragging major currencies around the world to multi-decade lows. 

Tech stocks led the decliners in trading on Wall Street on the worries that the Fed will continue its aggressive rate hike plan, even if the economy dips to a recession and the labor market loses steam. 

The S&P 500 index fell 0.8% to 3,610.89 and the Nasdaq Composite declined 1.3% to 10,510.83. 

The Nasdaq is trading near a two-year low as chipmakers dive after President Biden's administration imposed more controls on the export of technology and equipment to China. 

Banks and financial services are in focus ahead of the start of the earnings season with Morgan Stanley, Goldman Sachs, JP Morgan Chase and Citigroup are scheduled to report this week. 

Crude oil edged down 25 cents to $92.38 and natural gas dropped 7 cents to $6.66 a thermal unit. 

In Friday's trading, the yield on 2-year Treasury notes rose to 4.31%, 10-year Treasury notes jumped to 3.89% and 30-year bonds inched up to 3.84%.   

The U.S. bond market was closed on Monday for Columbus Day holiday. 

European markets lacked direction in early trading and turned weaker after the indexes in New York opened lower. 

The DAX index inched up 0.3% to 12,311.18, the CAC-40 index fell 0.1% to 5,860.04 and the FTSE 100 index fell 0.3% to 6,969.27. 

The euro declined 0.4% to 96.98 U.S. cents and the British pound eased 0.43% to $1.104. 

The Swiss franc held at 99.98 U.S. cents and the Canadian dollar inched up 0.1% to $1.373.  

The bond yields continued to rise across Europe on the worries that central banks are not likely to slow down aggressive rate hike campaigns. 

The yield on 10-year German bonds rose to 2.32%, British Gilt advanced to 4.458% and Italian bonds increased to 4.61%.  

Benchmark indexes in Asia closed down on the worries that the higher rates will fuel further rise in the U.S. dollar and stoke worldwide inflation. 

The Nikkei 225 index declined 0.7% to 27,116.11, the Hang Seng Index plunged 2.9% to 17,216.66 and the the Sensex index decreased 0.3% to 57,991.11. 

The Indian rupee edged down to a new record low of 82.31 and the Japanese yen to a new 24-year low of 145.75. 

Then Korean won and Australian dollar also declined as the U.S. dollar continued its rise against major worldwide currencies. 

South Korea's current account turned to a deficit of $3.05 billion in August from the downwardly revised $0.79 billion, the Bank of Korea said Monday. 

The goods account turned to a deficit of $4.45 billion from $6.03 billion a year ago.