Today’s stock market: Stocks fall after Iran attacks Israel

VaselineOctober 1, 2024

0 3 minutes read

Today’s stock market: Stocks fall after Iran attacks Israel

Stocks opened lower and remained there until the close, as investors worried about potential disruption from a major port strike and rising tensions in the Middle East. The latest round of economic data also weighed on sentiment.

The strike vote by about 50,000 members of the International Liquidators Association, a maritime workers’ union, “creates uncertainty about commodity availability and prices in the short term,” it said. Jose Torressenior economist at Interactive Brokers.

Not knowing how long the strike will last makes it difficult to gauge how big the impact will be on the economy, Torres adds.

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Manufacturing activity remains in contraction territory

Speaking of economics, Institute of Supply Management The manufacturing purchasing managers’ index (PMI) reached 47.2% in September – equal to what was seen in August. This was the sixth consecutive month that the PMI remained below the 50 level, indicating a contraction in activity.

The weak data illustrates “how much higher interest rates have affected credit-sensitive sectors, a headwind that is beginning to diminish as the Fed tapers,” it says Bill Adamschief economist at Comerica.

In another part of the economic calendar, the data from Bureau of Labor Statistics showed job openings rose 4.3% month over month to 8 million in August. Economists had expected a slight decline in available jobs.

“Today’s report is another indication that labor demand is easing but not collapsing, which is consistent with our view of a slowing economy and labor market,” it says Eugenio Alemánchief economist at Raymond James.

Stocks close lower after Iranian missile attack

Shortly after today’s economic data was released, reports began circulating that Iran had launched a missile attack on Israel.

Major indices closed solidly lower in reaction, with Dow Jones Industrial Average down 0.4% to 42,156, cel S&P 500 the decrease by 0.9% to 5,708, and the Nasdaq Composite down 1.5% to 17,910.

Rising geopolitical tensions sent crude oil futures up more than 5 percent in intraday trade before settling up 2.4 percent at $69.83 a barrel. Gold futures rose 0.9% to $2,690.30 an ounce.

CVS Health is reportedly exploring strategic options

Analyzing actions, CVS Health (CVS) shares fell 2.1% after Reuters reported that the healthcare company is conducting a strategic review of its business, including a potential split in two listed companies.

“CVS’s reported decision to proceed with a strategic review would not be particularly surprising given the company’s recent execution issues,” says BofA Securities analyst. Allen Lutzwho has mixed feelings about a possible breakup.

While it’s easy to assume that CVS-owned insurer Aetna might be more valuable as a stand-alone company, Lutz notes that the subsidiary’s underperformance this year “is the main driver of CVS’s weak share price, and it’s unclear how much it would reward investors respective businesses. as a stand-alone entity, particularly with respect to the current year’s or next year’s earnings.”

Apple escapes on the warning of iPhone analysts

Apple ( AAPL ) was another notable decliner on Tuesday, with the mega-cap’s stock falling 2.9% and surrendering $104 billion in market value along the way.

AAPL’s weighting was a Barclays analyst note Tim Longwhich said recent supply chain checks indicate a massive reduction in orders for a “key semiconductor component” included in iPhones.

Long adds that the data suggests “weaker demand” for the iPhone 16 compared to last year and indicates that the December quarter is “increasingly exposed” to disappointing sales.

Ford Motor appears on Goldman Sachs upgrade

On the positive side of the ledger, Ford Motor (F) shares rose 1.8% according to Goldman Sachs analyst Mark Delaney updated auto stock to Buy on hold. “We believe there is a margin opportunity driven by the company’s more profitable commercial businesses,” Delaney wrote in a note, adding that cost actions “may help offset industry headwinds.”

Most analysts are more skeptical of Ford. Conformable S&P Global Market Intelligencethe consensus recommendation is Hold.

Boeing exits for potential stock sale

Boeing (BA) shares improved 1.4% after a Bloomberg report suggested that the aerospace giant is considering the issuance of shares to raise $10 billion in cash. The cash could help the company maintain its investment grade rating as an ongoing strike hurts its cash reserves.

“The extent of the strike’s impact on BA will be determined by its duration, which remains to be seen,” Jefferies analyst said. Sheila Kahyaoglu in a note dated September 23. It estimates a $1.3 billion impact on free cash flow per month, “which is largely due to the loss of 737 deliveries and corresponding cash payments (approximately $30 million each), along with the absorption of general expenses”.

VaselineOctober 1, 2024

0 3 minutes read

Vaseline

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