Wall Street mixed after weak business data; Tesla pulls Nasdaq

  • China ADRs fall on worries about the direction of the economy
  • Tesla falls on price cuts in China
  • US business activity contracts in Oct
  • Indices: Dow up 0.46%, S&P down 0.09%, Nasdaq down 1.19%

Oct 24 (Reuters) – US stock indexes were mixed in morning trade on Monday, with the tech-heavy Nasdaq hit by a slide in Tesla and other megacap stocks, while signs of a slowdown in the US economy raised hopes that the Federal Reserve this will eventually slow the pace of interest rate hikes.

Tesla Inc (TSLA.O) fell nearly 7% after cutting entry prices for its Model 3 and Model Y cars in China by as much as 9%, showing signs of slowing demand in the world’s largest auto market. Continue reading

Other megacap stocks, including those of Amazon.com Inc (AMZN.O) and Alphabet Inc (GOOGL.O), also fell ahead of gains during the week.

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US business activity contracted for a fourth straight month in October, a survey showed, the latest evidence of economic weakness amid high inflation and rising interest rates. Continue reading

Wall Street’s main indexes rallied on Friday after a report said the Federal Reserve is likely to debate a smaller rate hike in December.

“We think the Fed meeting (in November) could be a positive inflection point because it will prompt at least some members to reconsider their ultra-hawkish stance,” said Jay Hatfield, chief executive officer, Infrastructure Capital Management.

US Treasury yields fell after the report, hitting a 15-year high of 4.34% on Friday. Continue reading

The benchmark S&P 500 (.SPX) is up about 5% since its year-end low on Oct. 12. Despite the recent rebound, the index is down 21% so far in 2022, on course for its biggest drop since 2008.

Indexes posted their largest weekly percentage gains in four months on Friday, also helped by better-than-expected earnings reports.

In addition to Google parent Alphabet and Amazon.com, Microsoft Corp (MSFT.O) and Apple Inc (AAPL.O) are also due to report later this week.

Earnings reports from the four largest US companies by market cap could test an emerging rally on Wall Street as stocks fight back from recent lows.

“I think the bar for success for mega-cap companies is relatively low. Therefore, the reaction function on actual gains will likely be positive,” said Art Hogan, chief market strategist at B. Riley Wealth in New York.

“Earnings season really gives investors an opportunity to shift their focus to the actual earnings power of American companies, and I think that’s why we’re popping a bit.”

Of the 99 companies in the S&P 500 that reported their third-quarter earnings through Friday, 74.7% have beaten analysts’ expectations, according to estimates by Refinitiv IBES. The long-term average is 66.2%.

As of 10:28 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 141.93 points, or 0.46%, to 31,224.49, the S&P 500 (.SPX) was down 3.47 points, or 0.09% 3,749.28 and the Nasdaq Composite (.IXIC) fell 129.16 points, or 1.19%, to 10,730.56.

U.S.-listed shares of Chinese companies including Pinduoduo (PDD.O), JD.com and Baidu Inc fell between 18% and 30% as President Xi Jinping’s new leadership team heightened fears that growth will be sacrificed to ideology-driven policies. Continue reading

At a 1.46 to 1 ratio on the NYSE, bearish issues outweighed the leaders. At a 1.99 to 1 ratio on the Nasdaq, declining issues outweighed the leaders.

The S&P index posted 20 new 52-week highs and 4 new lows, while the Nasdaq posted 42 new highs and 204 new lows.

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Reporting by Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; Edited by Sriraj Kalluvila

Our standards: The Thomson Reuters Trust Principles.

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