Market Indexes Turned Volatile Ahead of House Vote, Oil Extended May Loss to 10%

Barry Adams
31 May, 2023
New York City

Stocks lacked direction as investors focused on the upcoming vote in the full House of Representatives this evening. 

The White House and Republican leaders agreed to suspend the debt ceiling for the next two years and freeze federal government spending for the next two fiscal years.  

Republican leaders are signaling the passage of the bill in the House despite a small group of lawmakers showing their displeasure with the agreement, highlighting that the spending cuts are not deep enough.    

Major averages lacked direction and investors hoped that the Republican dominated House would ratify the agreement. 

On the final day of May, the tech-heavy Nasdaq index advanced 6% in the month and the S&P 500 index gained 0.6%.

“I think we have the votes to pass this today,” said Rep. Patrick McHenry, a key Republican negotiator for the debt deal, in an interview on CNBC TV channel on Wednesday. 

 

U.S. Indexes & Yields 

The S&P 500 index decreased 0.4% to 4,190.97 and the Nasdaq Composite fell 0.3% to 12,985.73. 

The yield on 2-year Treasury notes decreased to 4.42%, 10-year Treasury notes edged down to 3.67% and 30-year Treasury bonds held at 3.90%. 

Crude oil declined for the second day in a row after China reported second  month of contraction in manufacturing sector. 

The official manufacturing purchasing manager's index declined for the second month to 48.8 in May from 49.2 in April, the National Bureau of Statistics reported Wednesday.     

The non-manufacturing purchasing manager's index, which tracks the confidence in the service and construction industries, slowed to 54.5 from 56.4 in April.    

In May, crude oil declined 9.5% and plunged 39% from a year ago.  

Crude oil fell $0.52 to $68.87 a barrel and natural gas prices increased 6 cents to $2.39 a thermal unit. 

 

U.S. Stock Movers

Advance Auto Parts, Inc plunged 30.50% to $78.30 after the auto parts retailer reported a sharp decline in earnings, cut its dividend and lowered its full-year estimate. 

The specialty retailer announced a quarterly dividend of 25 cents per share compared to $1.50 in the previous quarter. 

The company also slashed its annual earnings per share estimate between $6.0 and $6.50 from the previous outlook between $10.20 and $11.20.  

American Airlines Group Inc increased 1.8% to $14.88 after the international airline lifted its earnings outlook and revised higher operating margin. 

The airline revised higher second quarter earnings per share between $1.45 and $1.65 from the previously estimated range between $1.20 and $1.40. 

The company revised higher its margin estimate from between 11% and 13% to between 12.5% and 14.5%. 

Hewlett Packard Enterprise dropped 6.3% to $14.56 after the company announced mixed quarterly results. 

Sales in the latest quarter were $6.97 billion and adjusted earnings per share was 52 cents, both missed the expectations set by analysts.