Dow Today – Midday Report: US Stocks Mixed Following Surprise Dip in Industrial Production; Treasury Yields Advance
US stocks were mixed in choppy trade — with defensives as sole decliners — after industrial productivity fell for a second month in a row.
The Dow Jones Industrial Average slipped by 0.1% to 35,260.69, while S&P 500 was up by 0.2% and Nasdaq higher by 0.4%. Energy was the biggest gainer while healthcare, utilities and consumer staples were the only declining sectors after midday on Monday.
The 10-year US Treasury yield increased 1.7 basis points to more than 1.59%.
US industrial production fell 1.3% in September, compared with expectations for an increase of 0.1% in a survey compiled by Bloomberg and following a downwardly revised 0.1% decline in August.
“The risk was to the downside, thanks to Hurricane Ida at the start of the month and the cooler-than-usual weather – depressing demand for electricity to drive air-conditioning – but the hit was bigger than we expected,” Pantheon Macroeconomics chief economist Ian Shepherdson said in a note. “The underlying industrial recovery continues, though its pace has moderated.”
Following a 6.7% jump in Q2, the US economy is expected to see growth slowing to 3.5% in Q3, according to data compiled by Bloomberg.
China’s economy expanded 4.9% year over year in Q3, a slower sequential pace compared with 7.9% recorded in the previous quarter. It lagged consensus estimates of a slowdown to 5.2% in a Reuters’ poll and 5% in a separate survey by Bloomberg.
The COVID-19 resurgence and the power crunch in the country have weighed on economic activities, Commerzbank analysts said in a note to clients. In addition, the property concerns had also hit the sentiment and relevant investment, they added.
Meanwhile, West Texas Intermediate crude oil eased 0.2% intraday to $82.16 a barrel.
The price environment for oil remains constructive amid the ongoing energy crunch in China and tight competition between the rest of Northern Asia and Europe for scarce energy supply, particularly gas, said Jeffrey Halley, senior market analyst for Asia Pacific at the foreign exchange company OANDA, in a note.
The Organization for the Petroleum Exporting Countries and non-OPEC producers led by Russia are not showing any signs of boosting output and the US government remains mum on its strategic petroleum reserve releases, Halley said.
In company news, CDW (CDW) said it has agreed to buy Sirius Computer Solutions from a Clayton, Dubilier & Rice affiliate for $2.5 billion in cash. Shares of CDW jumped 4.4% intraday, the most on Nasdaq.
Ionis Pharmaceuticals (IONS) partner Biogen (BIIB) said a phase 3 study of tofersen failed to meet its primary endpoint in the treatment of superoxide dismutase 1 amyotrophic lateral sclerosis, a type of neurodegenerative disease. Shares of Biogen were down 3.7%, the worst performer on Nasdaq.
Disney (DIS) has delayed ‘Doctor Strange,’ ‘Thor 4,’ ‘Black Panther’ sequels as well as ‘Indiana Jones 5’, according to Variety. Barclays downgraded Disney‘s shares to equal-weight from overweight while cutting its price target to $175 from $210. MoffettNathanson also lowered its price objective to $180 from $185 but kept the neutral rating. Shares of Disney fell 3.1%, the steepest decliner on the Dow.
In the metals markets, gold was down 0.1% to $1,765.20, silver was down 0.3% to $23.29 an ounce, and copper was down 0.2% to $4.72 per pound. Among energy ETFs, the United States Oil Fund was down 0.2% to $57.06 while the United States Natural Gas Fund was down 4.4% to $18.02.