U.S. Indexes Trim Weekly Losses Amid Looming Federal Government Shutdown, Auto Strike Expands

Barry Adams
22 Sep, 2023
New York City

Market indexes advanced on Wall Street in Friday's trading but rate worries overshadowed market sentiment. 

Benchmark indexes gained after investors searched for bargains and trimmed weekly losses to just over 2%. 

Investors reviewed the growing possibilities of the federal government shutdown as lawmakers of both parties struggle to find common ground to pass budget. 

If the U.S. House of Representatives fail to agree on spending bill by the end of the month, which also marks the end of fiscal year for the federal government, several branches of the non-essential services will shut down beginning October 1. 

Automakers were also in focus after the United Auto Workers Union targeted strikes at more plants owned by Stellantis and General Motors. 

U.S. short term Treasury notes yields traded near 16-year highs as investors adjust to one possible rate hike later in the year and rates staying elevated in 2024. 

 

U.S. Indexes & Yields 

The S&P 500 index increased 0.5% to 4,349.05 and the Nasdaq Composite advanced 0.8% to 13,325.59. 

The yield on 2-year Treasury notes hovered at 5.11%, 10-year Treasury notes inched higher to 4.43% and 30-year Treasury bonds edged up to 4.56%. 

Crude oil increased $1.10 to $90.71 a barrel and natural gas prices declined 1 cent to $2.60 a thermal unit. 

The dollar index edged higher to 105.47, the level last seen in March and extended gains from the low of 99.85 on July 13. 

 

U.S. Stock Movers 

McDonald's Corp advanced 0.7% to $273.0 after the fast food chain operator said it plans to increase its royalty fees charged to franchisee operators to 5% from 4%. 

McDonald's has not increased the fee for several decades but the company also charges for store rent, digital infrastructure and other marketing services.  

Ford Motor Company increased 2.5% to $12.51 after CNBC suggested that the company is making progress in negotiations with striking members of the United Auto Workers union. 

Scholastic Corp dropped 14.5% to $33.28 after the publishing company reported lower-than-expected revenue and earnings in its latest quarter. 

Revenue in the fiscal first quarter ending in August declined 13% to $228.5 million reflecting continuing softness in retail sales. 

Net loss surged to $74.2 million from $45.5 million and diluted loss per share expanded to $2.33 from $1.33 a year ago. 

Activision Blizzard Inc gained 1.9% to $93.93 after the U.K. regulators said new proposal from Microsoft met several terms required to clear the purchase of the company. 

Arm Holdings Plc decreased 2.6% to $50.77 and the advanced chip designer traded below its initial public offering price  of $51 a share priced on September 14.