U.S. stocks tumble in early trading on Monday but could end October with a record gain in decades.
The Dow Jones Industrial Average jumped 14.4% from the beginning of the month to the close of trading on Friday. The indicator may record the highest monthly gain since January 1976 and the best October in its history.
The attention of market participants is directed to the November meeting of the US Federal Reserve System (FRS).
The meeting will be held on November 1-2, and, according to most analysts, the Fed will again raise the key interest rate by 75 basis points, to 3.75-4% per annum. After that, as expected, the US Central Bank may slow down the rate hike.
“Last week, there were plenty of reasons for a big sell-off in stocks, including weak financials from tech giants, data on the acceleration of growth in the PCE index, the main indicator of inflation for the Fed, and new lockdowns in China,” said Tom Lee, head of research at Fundstrat. The S&P 500 is up 4% in a week and up 12% in two weeks.”
About half of the S&P 500 index companies have already reported their third-quarter results, and on average, they recorded a 2.2% increase in quarterly earnings, which is the worst performance since the third quarter of 2020, when the figure collapsed by 5.7%, said a senior analyst at FactSet. John Butters.
However, 71% of the companies that reported so far beat market expectations in terms of earnings per share, and 68% in terms of revenue.
Shares of Chinese electric vehicle makers XPeng (SPB: XPEV) Inc. and Li Auto (SPB: LI) Inc. in the US are down by 5.2% and 3.8% respectively, dropping to a record low due to weak Chinese statistics.
As it became known on Monday, the Purchasing Managers’ Index (PMI) in China’s manufacturing industry in October fell to the lowest since July 49.2 points from 50.1 points a month earlier. Experts on average expected it to drop to 50 points. Meanwhile, China’s services PMI fell to 48.7 in October, falling below 50 for the first time since May.
Shares of Emerson Electric (SPB:EMR) rose 0.1%. The engineering firm posted a 10% increase in net income in the fourth quarter of fiscal 2022, with adjusted earnings and revenue better than expected. The firm also confirmed a deal to sell a majority stake in the HVAC technology business to investment firm Blackstone Inc. for $9.5 billion.
XPO Logistics (SPB: XPO) is up 2%. The transport and logistics company recorded a decrease in revenue in the third quarter, but increased net income from ongoing operations.
The market value of Global Payments (SPB: GPN) falls by 7.5%. The American fintech firm saw a 14% increase in revenue in the last quarter, which came as a surprise to analysts, while its adjusted earnings increased by 14%, in line with experts’ forecasts.
Capitalization of Align Technology (SPB: ALGN) Inc. increased by 5%. The medical device maker on Monday announced it was launching a $200 million accelerated share buyback program. The company’s shares have fallen 71.3% since the start of the year, the worst performer of any company in the S&P 500 index.
The Dow Jones Industrial Average fell 159.12 points (-0.48%) by 4:48 pm to 32,702.68 points.
The drop leader among the components of the index are Boeing Co. (SPB: BA) (-2.5%), Chevron Corp. (SPB: CVX) (+1.5%).
Standard & Poor’s 500 fell 28.47 points (-0.73%) to 3872.59 points.
The Nasdaq Composite fell 122.84 points (-1.11%) to 10,979.61 points.
