U.S. stocks are falling as earnings season continues; Netflix, Tesla next
Investing.com -- U.S. stocks are falling on Wednesday as corporate earnings reports continued to pour out.
At 11:08 ET (15:08 GMT), the Dow Jones Industrial Average was down 145 or 0.4%, while the S&P 500 was down 0.7% and the NASDAQ Composite was down 0.7%.
The main indices on Wall Street closed in a muted fashion on Tuesday, as investors weighed up stronger than expected retail sales as well as more earnings reports.
The 30-stock Dow gained just 13 points, or 0.1%, while the benchmark S&P fell marginally and the tech-heavy Nasdaq dropped 0.3%.
Escalating Middle East tensions
Tensions in the Middle East were heightened Wednesday after a missile strike on a Gaza hospital killed hundreds of Palestinians.
Palestinian officials blamed the Israelis for the strike, while Israel said the accountability lay with a failed rocket launch by Palestinian militants. Both sides denied responsibility.
President Joe Biden was in Israel to meet Israeli Prime Minister Benjamin Netanyahu and the Israeli war cabinet. A planned summit between Biden, Palestinian President Mahmoud Abbas and Egyptian President Abdel Fattah al-Sisi was cancelled.
Netflix earnings due after the close
Earning season continued on Wednesday, with investors anticipating reports from streaming giant Netflix Inc (NASDAQ:NFLX) and electric vehicle maker Tesla Inc (NASDAQ:TSLA) due out after the closing bell.
Netflix's crackdown on password-sharing is expected to have boosted subscribers by about 6 million in the third quarter, and investors will be looking to see whether this sets the stage for price increases in an attempt to further increase revenue.
Banking giant Morgan Stanley (NYSE:MS) reported before the opening bell. While revenue and profit topped estimates, investors were disappointed in results from investment banking and wealth management, sending the shares 7.4% lower.
United Airlines (NASDAQ:UAL) will also be in the spotlight after the carrier issued disappointing fourth-quarter guidance after the close Tuesday, and shares fell 8.7%. The transportation and logistics company JB Hunt's (NASDAQ:JBHT) profit fell slightly short of expectations in the third quarter, and shares fell 8%.
Additionally, drugstore chain Rite Aid (NYSE:US90274J5618=UBSS) raised concerns about its ability to remain in business in a regulatory filing on Wednesday, days after it filed for bankruptcy protection.
Housing data was mixed
Housing starts came in slightly lower than expected at 1.36 million annualized in September, though that was up from the prior month. Building permits for September were slightly higher than expected at 1.47 million, down from the prior month.
Data released on Tuesday showed retail sales were stronger than expected in September, suggesting a reasonably healthy economy even with the Federal Reserve’s aggressive monetary tightening this year.
The Fed is expected to hold interest rates steady when it meets next month, and officials will be weighing the data to help decide its next steps in monetary policy.
Oil soars after Gaza hospital blast
Oil prices soared Wednesday after the deadly blast at a Gaza hospital renewed concerns that a spillover of the Israel-Hamas conflict could disrupt crude supplies in the oil-rich region.
The crude market had received a boost late Tuesday after data from the American Petroleum Institute indicated that U.S. inventories fell a hefty 4.4 million barrels in the week to October 13, reducing worries about a reduction in demand in the world’s largest consumer.
Official data from the Energy Information Administration is due later in the session.
(Oliver Gray contributed to this item.)
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