Investors Bid Up Stocks In Cautious Trading With Earnings In Focus

Barry Adams
02 Oct, 2023
New York City

Stocks in volatile trading closed higher after investors shifted focus away from Washington to upcoming earnings releases this week. 

The S&P 500 index and the Nasdaq Composite advanced and caution prevailed in trading on Monday's trading on Wall Street after crude oil prices declined.  

The U.S. Congress passed a short-term spending plan that will fund various government programs for the next 45 days but deep divisions remain in the Republican controlled House over the level of funding and war efforts in Ukraine. 

For now, investors treated the latest spending plan as a stop-gap measure that postpones the finalization of the new fiscal year budget and debt levels. 

Investors are shifted attention to attention to the upcoming earnings release and banks are expected to report a rebound in earnings despite the rising interest rates. 

In September, the S&P 500 index registered its worst monthly decline in 2023 of 4.9% and the Nasdaq Composite fell 5.8%. 

In the third quarter, the S&P 500 index dropped 3.7% and the Nasdaq Composite fell 4.1%. 

Investors have been selling stocks since the market indexes reached this year's high in July but the S&P 500 index is still up about 12% in the year so-far. 

 

U.S. Indexes & Yields 

The S&P 500 index edged up 0.006% to 4,288.39 and the Nasdaq Composite rose 0.7% to 13,307.77. 

The yield on 2-year Treasury notes increased to 5.11%, 10-year Treasury notes inched lower to 4.65% and 30-year Treasury bonds edged down to 4.77%. 

Crude oil decreased $2.27 to $88.40 a barrel and natural gas prices decreased 8 cents to $2.84 a thermal unit. 

The dollar index edged higher to 107.01, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.  

 

U.S. Stock Movers 

Tesla Inc dropped 1.9% to $245.43 after the company said production in the third quarter declined because of the planned production shutdown. 

Electric vehicle deliveries in the third quarter increased to 466,140 units from 365,923 units and production rose to 365,923 from 343,820 a year ago. 

The company reiterated its full-year production outlook of 1.8 million units. 

 

European Markets Struggled to Advance 

European markets reversed earlier gains after the release of manufacturing survey and amid ongoing rate path worries. 

Market indexes in Frankfurt, Paris and London edged lower amid worries of continuing slowdown in the manufacturing sector. 

 

Persistent Manufacturing Weakness In Eurozone and UK 

The final euro zone HCOB manufacturing Purchasing Managers' Index declined to 43.4 in September from 43.5 in the previous month.

The reading below 50 indicated contraction, and the latest survey showed demand declined at the fastest pace since record keeping began in 1997.  

A separate survey showed that the UK's manufacturing sector continued to face weakening activities in September. 

The seasonally adjusted S&P Global/CIPS manufacturing purchasing managers' index edged slightly higher to 44.3 from 39-month low of 43.0 in August. 

Manufacturing sector outlook remained weak because of weak demand from domestic and foreign customers.

 

Euro Area Jobless Rate Drops to Record Low  

Job market conditions remained tight in the Euro Area and the jobless rate declined to the lowest level since record keeping began in 1995. 

The seasonally adjusted jobless rate in the Euro Are decreased to 6.4% in August from the upwardly revised 6.5% in July, Eurostat reported Monday.  

Jobless rate in August a year ago was 6.7%. 

The number of unemployed people decreased by 107,000 from the previous month to 10.856 million. 

Of the four large economies in the Euro Area, Germany recorded the lowest jobless rate of 3% and Spain led with the highest rate of 11.5%. 

Jobless rate in Italy and France was 7.3%. 

Meanwhile, the youth unemployment rate, jobless rate among jobseekers 25 years and younger, edged down to a record low of 13.8% in August 2023, from 13.9% in July. 

 

Europe Indexes & Yields

The DAX index decreased 0.9% to 15,247.51, the CAC-40 index declined 0.9% to 7,068.16 and the FTSE 100 index fell 1.3% to 7,510.72.

The yield on 10-year German bonds increased to 2.87%, French bonds traded higher to 3.43%, the UK gilts edged up to 4.47% and Italian bonds rose to 4.78%.

The euro edged lower to a three-month low to $1.05, the British pound to $1.21 and the U.S. dollar fetched 91.41 Swiss cents.

Brent crude decreased $1.59 to $90.60 a barrel and the Dutch TTF natural gas edged higher by €2.16 to €39.70 per MWh.

 

Europe Stock Movers 

Banco Bilbao Vizcaya Argentaria, S.A. increased 1% to €7.79 after the Spanish bank received an approval from the European Central Bank for its stock repurchase program of up to €1 billion. 

BAE Systems Plc added 0.9% to 1,006.50 pence after the company won a £4 billion submarine contract from the UK government as a part of the AUKUS program with the U.S. and Australia to build attack submarines. 

United Utilities Group Plc gained 1.8% to 965.20 pence after the company reiterated its outlook for the year ending in March. 

Deutsche Bank AG decreased 1% to €10.34 after local news reports suggested that the German financial regulator has appointed a special monitor to oversee the company's handling of customer service problems at its unit Post Bank.

Allianz SE declined 0.3% to €224.20 and the company extended the tenure of Oliver Bates as chief executive and chairman of the board. 

Melrose Industries Plc decreased 0.5% to 466.70 pence after the company launched its £500 million stock repurchase program. 

Pennon Group Plc jumped 3.7% to 607.75 pence after the water and waste water management company said business performance is in-line with management expectations in the first-half ending in September.