U.S. Stocks Turned Lower, Moody's Follows Fitch In Lowering U.S. Debt Rating Outlook

Barry Adams
13 Nov, 2023
New York City

Stocks struggled in early trading after Moody's lowered its U.S. credit rating outlook, citing rising debt and fiscal deterioration.

The credit rating agency lowered its outlook to "negative" from "stable" but retained the debt rating at AAA, the highest level.

Three months ago, Fitch Ratings lowered its U.S. log-term credit default rating to AA+ from AAA, citing rising debt levels and interest rates, increasing polarization, and a lack of a stable budget process.

The U.S. federal government is expected to run out of cash on November 17, and lawmakers are struggling to pass even a short-term budget.

The U.S. House of Representatives, controlled by the Republican Party, is struggling to propose a spending bill to cover expenses for the next three months.

Rising interest rates and outsized defense budgets are expected to increase federal government spending in the current fiscal year, forcing the federal government to sell more debt and push interest rates even higher.

 

U.S. indexes and Yields

The S&P 500 index decreased 0.4% to 4,396.09, and the Nasdaq Composite fell 0.6% to 13,711.95.

The yield on 2-year Treasury notes increased to 5.05%, 10-year Treasury notes inched higher to 4.63%, and 30-year Treasury bonds edged up to 4.76%.

Crude oil increased $0.32 to $77.39 a barrel, and natural gas prices rose 7 cents to $3.19 a thermal unit.

Gold increased $0.37 to $1,937.60 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 105.89.

 

U.S. Stock Movers

Boeing Co. jumped 3.8% to $204.0 after the airplane maker won an order for 95 planes from Emirates Airline.

The order is worth $52 billion at the list price.

The state-controlled airline, a subsidiary of Emirates Group, increased its order to 35 from 30 for 787  Dreamliners and ordered an additional 90 777X planes, increasing its order for widebody jets to 205 planes.

General Electric Co. edged up to $115.35 after Emirates Air confirmed an additional order for 202 GE9X engines, which will power 777X planes.

Monday.com soared 10.4% to $154.25 after the project management software company reported better-than-expected third-quarter results.

The company also raised its full-year sales estimate to between $723 million and $725 million, compared to its previous estimate of between $713 million and $717 million.