EconomyMarkets
Dow jumps 530 points as yields ease, but Netflix and Kospi slide before Indian markets reopen
Small companies and rate-sensitive shares led Wall Street higher on Tuesday while big technology stocks stalled. Brent eased to $108.79 and Tokyo was set to bounce as Indian traders return from the Dussehra break.
Key points
- The Dow rose 529.85 points, or 1.02%, to 52,495.88, while the Nasdaq ended flat.
- Netflix shares fell about 6% after hours on a weaker forecast and job cuts.
- South Korea's Kospi dropped 3.7% on Tuesday as chip stocks sold off.
Wall Street ended Tuesday with a broad rally that left the biggest technology names behind, and Indian investors return from the Dussehra holiday on Wednesday to a mixed set of signals: firmer US shares and slightly cheaper oil, but a heavy sell-off in Asian chip stocks and a slide in Netflix after hours.
The Dow Jones Industrial Average rose 529.85 points, or 1.02%, to 52,495.88, with 3M up 5.78%. The S&P 500 added 0.28% to 7,712.57. The Nasdaq Composite slipped 0.02% to 26,424.82, and the Russell 2000 index of smaller companies jumped 1.65% to 2,773.42. Health care, real estate, utilities and financial shares led the gains.
Why yields mattered
The rally rested on lower borrowing costs. US housing starts fell 5.2% in September and pending home sales dropped 7.3%, and the 10-year Treasury yield eased three basis points to 5.12%. The 30-year yield fell six basis points to 5.42%. Shares that do well when rates fall, from property trusts to regional lenders, moved up the most.
Technology did not join in. Chip-equipment makers Lam Research, KLA and Arm fell about 3% each, and Meta lost 1.59% for a fifth straight fall ahead of its results on Wednesday. Netflix closed 1.7% lower and then fell about 6% after hours when it cut its advertising revenue forecast and announced job cuts. Co-chief executive Greg Peters told investors: “We are currently a bit behind our aggressive target for the year.”
Other results after the bell were stronger. Super Micro Computer rose about 12.7% after raising its revenue outlook, and SpaceX and Capital One gained more than 4%.
Oil, gold and the dollar
Brent crude for December settled 0.69% lower at $108.79 a barrel after touching $111.99 during the day, as reports of Iranian attacks on tankers in the Strait of Hormuz kept traders nervous. US crude ended at $98.28. Gold for December eased 0.42% to about $4,143 an ounce, and the dollar index fell 0.26% to 101.71.
Asia this morning
Asia had a rough Tuesday. The Kospi fell 3.7% to 5,553 as chip shares tumbled, Japan’s Nikkei 225 lost 1.3% to about 64,075, and Hong Kong’s Hang Seng dropped 1.3%. Futures pointed to a rebound in Tokyo on Wednesday, with the Nikkei indicated about 1.7% higher, and a smaller rise in Hong Kong.
What it means for India
The Sensex last closed at 73,852.90 and the Nifty at 22,888.95 on Monday, after falls of more than 1%. On Monday afternoon GIFT Nifty futures were trading at 22,887, pointing to a flat start; with Indian exchanges and the currency market shut on Tuesday, Wednesday’s open will be the first chance to price in two days of global moves. The rupee last ended at 94.92 to the dollar.
Before the holiday, Ajit Mishra of Religare Broking advised a cautious approach, pointing to weak banking stocks, foreign fund flows and crude near $108. He put support for the Nifty at 22,550 to 22,750 and resistance at 23,200 to 23,300.
The day is busy at home: the Jio Platforms offer opens, the Reserve Bank of India publishes its policy minutes and Eternal reports results. Tesla and Meta report after the US close on Wednesday.