Week: S&P 500 Advanced 6.1%, Nasdaq Soared 8.8%

Barry Adams
11 Nov, 2022
New York City

Stocks on Wall Street struggled a day after benchmark indexes soared the most in one-day in two years. 

Benchmark indexes rebounded from morning doldrums and extended gains in choppy trading. 

Tech stocks turned higher from the morning losses and widely held Tesla, Amazon, Microsoft, Apple, Meta and Alphabet jumped between 1% 4%. 

The S&P 500 index rose 0.9% to 3,992.92 and the Nasdaq Composite index advanced 1.9% to 11,323.33. 

For the week, the S&P 500 index soared 6.1% and the Nasdaq Composite index advanced 8.8%. 

Mood on Wall Street was cautious after the largest cryptocurrency exchange FTX filed for bankruptcy protection and CEO Sam Bankman-Fried resigned. 

The cryptocurrency exchange is also facing investigations from the U.S. Department of Justice and the Securities and Exchange Commission. 

The sudden collapse of FTX has sent shock waves in the crypto investment community and cast a harsh spotlight on the investment practices of leading venture capital firms in Silicon Valley.  

FTX was operating with little oversight from its investors, board of directors and local and international regulators, while billions of dollars of transactions were processed on its platform. 

The company is also alleged to have dipped into the customer accounts and used the assets as collateral for related party transactions. 

Bitcoin dropped 6% to $16,670 and other popular cryptocurrencies dropped between 4% and 6%. on the FTX bankruptcy news. 

 

China Eases Restrictions But Warns of Rising Infections

Energy prices rose after China eased some of the coronavirus-linked stringent mobility restrictions.  

China, a day after top officials reiterated the need for stringent lockdowns, suggested improvement to current rules. 

The revised rules trimmed the quarantine requirements to five days from seven, cut PCR test to one from two prior to 48 hours of air travel and said it will crack down on arbitrary lockdowns and punish responsible officials. 

The National Health Commission also warned that infections are likely to spread with the arrival of winter and virus mutation.  

Chinese stocks rose and energy prices advanced after Guangdong province immediately implemented revised mobility restrictions. 

Crude oil increased $2.47 to $88.95 a barrel and natural gas futures fell 31 cents to $5.92 a thermal unit. 

Gold edged up 0.7% to $1,767.48 an ounce and silver fell 2 cents to $21.65 an ounce. 

 

Stable Treasury Yields

The U.S. bond market was closed to observe Veterans Day but bonds changed a little in private trading. 

The yield on 2-year Treasury notes declined to 4.33%, 10-year Treasury notes eased to 3.83% and 30-year Treasury bonds fell to 4.08%.  

 

U.S. Movers 

Beazer Homes added 1.7% to $12.53 after the homebuilder reported revenue and earnings ahead of expectations in its latest quarter.

Rising home prices and improving gross margin drove the better performance in the quarter.

Homebuilding gross margin increased 330 basis points to 22.6% and average home price increased 22% to $510,700.

Doximity Inc soared 20% to $31.60 after the online platform for healthcare professionals reported better-than-expected quarterly results.

For the December quarter, the company guided revenue between $110.7 million and $111.7 million.

The company also launched a $70 million stock repurchase plan to be executed over the next twelve months.

Duolingo Inc fell 3.3% to $83.30 and the online language platform operator reported a smaller loss and lifted its annual outlook.

Monthly active users increased 35% to 56.1 million, daily active users rose 51% to 14.9 million and paid subscribers jumped 68% to 3.7 million.  

The company estimated fourth quarter revenue between $98 million and $101 million and full-year 2022 revenue between $364 million and $367 million.

LegalZoom.com, Inc  soared 15% to $10.92 and the online legal documents and advice provider reported smaller-than-expected quarterly loss and lifted its full-year revenue estimate.

The company guided fourth quarter revenue between $145 million and $147 million and full-year 2022 revenue between $617 million and $619 million.

US Bancorp fell 0.3% to $44.75 and Warren Buffett-controlled Berkshire Hathaway lowered its stake in the bank to 53 million shares of 3.6%, according to a regulatory filing with the SEC.

Berkshire has sold 91 million shares in the year so far and slashed its holding in the financial services company.

Wynn Resorts added 3.2% to $74.58 and  Las Vegas Sands added 4.3% to $43.85 after China loosened Covid-19 restrictions.

Both companies have a significant presence in Macau, China, a tourist and travel destination for Chinese citizens.  

 

German Inflation Accelerated, UK GDP Shrank

European markets traded sideways after the UK GDP shrank less-than-expected and German inflation accelerated in October. 

Consumer price index in Germany accelerated to 10.4% from 10.0% in September, Destatis reported today. 

The estimate confirmed the flash estimate released a few days ago. 

The UK GDP shrank in the third quarter, said the Office for National Statistics on Friday. However, the pace of decline was smaller-than-expected 0.5%. 

The weakness in the service sector dragged the GDP down 0.2% in the September quarter from the previous quarter, but the economy expanded 2.4% from a year ago.

High interest rates and inflation are expected to drag the economy into the longest recession since the record keeping began.

The Bank of England has estimated the economy to shrink in the second half of 2022 and the weakness to persist in 2023 and 2024.

The DAX index increased 0.3% to 14,183.75, the CAC-40 index added 0.4% to 6,581.42 and the FTSE 100 index declined 0.5% to  7,336.80.

For the week, the DAX index increased 5.7%, the CAC-40 index added 3.4% and the FTSE index inched up 0.09%. 

The yield on 10-year German Bunds increased to 2.14%, French bonds edged higher to 2.65%, UK Gilts advanced to 3.35% and Italian bonds inched up to 4.19%. 

 

Europe Movers 

Resource stocks gained after crude oil and natural prices edged up in international trading. 

Antofagasta and Anglo American jumped between 4% and 5% following the advance in commodities prices after China eased some mobility restrictions. 

Richemont SA jumped 17.8% after the company reported higher first-half results and struck an optimistic tone. 

Revenue in the first-half ending in September rose 24% to