U.S. Averages Pause After Weeklong Rally

Barry Adams
07 Nov, 2023
New York City

Stocks on Wall Street paused after rallying for more than a week, and investors reassessed the Fed's next move.

Market indexes edged slightly lower in pre-market trading after the S&P 500 index advanced for six days in a row and the Nasdaq Composite for seven days in a row.

Investors bid up stocks after the Federal Reserve paused rate hikes for the second time in a row on November 1 after citing progress on inflation.

In addition, after the Fed's rate decision, a softer increase of 115,000 in nonfarm payroll in October also supported the Fed's case of holding interest rates.

Market indexes soared more than 5% last week on the hopes that the Federal Reserve may hold rates for the third time in a row at the next meeting on December 12–13.

In the absence of any market-moving economic releases, investors are likely to focus on comments from Fed Chairman Jerome Powell and react to earnings announcements.

Chairman Powell is scheduled to deliver the Fed's assessment of the economy at two separate industry gatherings on Tuesday and Wednesday.

 

U.S. International Trade Deficit Widened In October 

The trade deficit in the U.S. widened to $61.5 billion in September, following an upwardly revised $58.7 billion gap in August, the Bureau of Economic Analysis reported Tuesday.

Imports increased 2.7% from a year ago to $322.7 billion, and exports rose at a slower 2.2% pace to $261.1 billion.

Exports rose to the highest level since August 2022, driven by crude oil, soybeans, corn, travel, and transport services.

Imports advanced on the rising demand for cell phones, civilian aircraft parts and machinery, passenger cars, and computer accessories.

 

U.S. indexes and Yields

The S&P 500 index decreased 0.1% to 4,341.04, and the Nasdaq Composite increased 0.1% to 13,589.12.

The yield on 2-year Treasury notes increased to 4.95%, 10-year Treasury notes inched higher to 4.62%, and 30-year Treasury bonds edged down to 4.78%.

Crude oil increased $1.85 to $78.95 a barrel, and natural gas prices fell 15 cents to $3.11 a thermal unit.

Gold decreased $12.26 to $1,965.48 an ounce after bond yields edged lower and the dollar weakened.

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.75.

 

U.S. Stock Movers

Uber Technologies Inc. increased 1.7% to $48.96 despite the double-digit ride hailing company's weaker-than-expected quarterly results.

Revenue in the third quarter increased 11% to $9.3 billion from $8.3 billion, but the company swung to a loss of $1.3 billion from a profit of $221 million, and diluted earnings per share were  ($0.61) compared to 10 cents a year ago.

Gross bookings in the quarter increased by 21% to $35.3 billion, driven by a 31% increase in mobility bookings to $17.9 billion and an 18% increase in delivery bookings to $16.1 billion.

Monthly active customers on the platform increased by 15% to 142 million from 124 million.

The company anticipates gross bookings in the fourth quarter in the range of $36.5 billion and $37.5 billion.

WeWork Inc. closed at 84 cents in Monday's trading but dropped as low as 11 cents in Tuesday's pre-market trading after the company filed for Chapter 11 bankruptcy protection in New Jersey federal court.

The company said its liabilities are between $10 billion and $50 billion and said it has entered into agreements with most of its secured note holders.

WeWork was valued at $47 billion in 2019 fund raising led by SoftBank but was forced to accept a sharply lower valuation of about $8 billion when it agreed to go public through a special purpose acquisition company in 2021.

TripAdvisor Inc. soared 10% to $17.76 after the online travel platform company reported better-than-expected quarterly results.

Revenue in the third quarter increased 16% to $533 million from $459 million, net income increased 8% to $27 million from $25 million, and diluted earnings per share rose to 19 cents from 17 cents a year ago.

On September 7, the company's board authorized a $250 million stock repurchase plan over the next two years.