The stock market fell on Monday as investors feared the state of the economy and rising Covid-19 infections in China could spread and thwart this week’s key holiday shopping season. Dow Jones component waltz disney (DIS) soared after launching CEO Bob Chapek and replacing him with former chairman and CEO Bob Iger.
The S&P 500 lost 0.4% while the Nasdaq fell 1.1%. The Dow Jones Industrial Average was flat. The Russell 2000 Small Cap Index fell 0.8%.
Volume on the NYSE and Nasdaq was higher from the same time on Friday. It’s a shortened holiday week, so expect volume to contract as people head out to see family and friends.
Crude oil lost 0.5% to $79.66 a barrel after plunging as much as 6% in morning trading. The futures contract recovered when Saudi Arabia denied a report that OPEC would increase production by 500,000 barrels.
Economic concerns continue to weigh on the stock market
The SPDR Energy Select Sector ETF (XLE) fell 1.4% and the S&P Consumer Discretionary Sector ETF (XLY) fell 1.6%, making them the biggest movers among the S&P 11 sectors.
The yield on 10-year Treasury bills remained unchanged at 3.82%. Bitcoin fell 3.7% to $15,646.
The odds of a 50 basis point hike at the December Fed meeting stand at 80.6% while 19.4% are looking for a 75 basis point hike, according to the CME FedWatch Tool.
“Investors should follow Fed guidance as rates will remain high for a longer period,” wrote John Kerschner, head of US securitized products and portfolio manager at Janus Henderson, in an article published over the weekend. “The Fed reiterated its hawkish stance as markets return to accommodative monetary policy.”
Chinese stocks tumbled as rising illnesses and four Covid-19 deaths sapped hopes the Asian nation will abandon its ‘zero Covid’ policy. Some investors fear that the number of Covid cases around the world will increase this winter.
Disney Stock rallies with Chapek Boot
Walt Disney rebounded 5.8% on Monday on news that former Chairman and CEO Bob Iger would take over as CEO, effective immediately. Bob Chapek replaced Iger in February 2020 but struggled during his tenure.
The theme park and media giant reported worse-than-expected fourth-quarter fiscal losses across streaming services Disney+, Hulu and ESPN Now, losing twice as much money as it did a year ago. Disney stock remains 40% off its 52-week high.
netflix (NFLX) fell 1.1% in light volume, reacting to news from Disney. Netflix stock is finding support at its 21-day exponential moving average.
Retailers are expected to release their results on Tuesday include best buy (ABY), Nordström (JWN), dollar tree (DLTR) and Dick Sporting Goods (DKS).
Fertilizer stocks soared as lithium carbonate, the key ingredient in electric vehicle batteries, neared record highs. Based in Chile Sociedad Quimica y Minera (SQM) led the way with a 10% gain. SQM topped third-quarter earnings estimates late last Wednesday, while announcing a production expansion.
SQM is in a cup with handle with a buy point of 112.45.
Stock market today: Tesla, Smucker’s, Domino’s
You’re here (TSLA) fell more than 6% in the current stock market as investors feared CEO Elon Musk’s Twitter troubles could spread like a contagion to electric vehicle sales. The stock fell to its lowest level in two years and is now down more than 58% since the all-time high of 414, recorded on November 4, 2021.
J. M. Smucker (SJM) gained 1.8% after posting a beating from the high and low numbers in the third quarter of 2023. The company also increased its full-year 2023 EPS and net sales growth. The stock is in the 5% buy zone of a handle cup base, with a buy point of 145.
Dominos Pizza (DPZ) rose 1.8% after announcing it would employ 800 Chevy Bolt electric vehicles in its delivery fleet. The first 100 are expected to arrive in November, with the remaining 700 in the coming months. The company cites reduced maintenance costs, savings on gas expenses and advanced safety features as benefits of adding electric vehicles.
General Motors (GM), which makes the Chevy Bolt, fell 0.7%.
Dell Technologies (DELL) fell 3.5% and ZoomTechnologies (ZM) lost 1.6%, ahead of the third quarter earnings release expected after the close.
ETF Innovator IBD 50 (FFTY) loses 1.5%, weighed down by oil stocks earth stone energy (ESTE) and Diamondback Energy (CROC).
Follow Michael Molinski on Twitter @IMmolinski
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