Stocks sink as debt crunch continues: Stock market news today
Here's what's moving markets on Tuesday, May 23, 2023.
US stocks closed lower Tuesday on Wall Street concerns that the debt-ceiling debate in Washington won't reach a resolution.
The S&P 500 (^GSPC) ended the session down 1.12%. The Dow Jones Industrial Average (^DJI) dipped 0.69%, or more than 200 points. The technology-heavy Nasdaq Composite (^IXIC) declined more than 1.26%.
In Treasuries, yields moved lower across the curve Tuesday, with the benchmark 10-year yield edged down to 3.7%. Two-year yields climbed to 4.34%, and those on the 30-year bond ticked lower to 3.95%. The extended losses came as worries over the debt-ceiling standoff intensified, as the prospect of a default moves closer.
Tuesday's negotiation talks initially provided some hope a deal could be reached. That followed optimistic remarks from President Biden and House Speaker Kevin McCarthy the previous day.
But McCarthy reportedly said in a closed-door meeting to Republican colleagues that "we are nowhere near a deal yet" hours after saying in the Oval Office "I think, at the end of the day, we can find common ground."
The back-and-forth has left investors on edge in the countdown to the June 1 "X-date", which is when Treasury Secretary Janet Yellen said a default is likely to come.
“Our base case remains that the debt ceiling ultimately does get lifted/suspended though the journey to that end could be at the eleventh hour and drive significantly higher market instability than appreciated by the market currently,” Dubravko Lakos, chief US equity strategist at JPMorgan, wrote in a note Monday.
“We expect a temporary/comprehensive deal on the debt ceiling to negatively impact federal spending and for a likely contentious budget negotiation process later this year,” Lakos added.
On the economic front, S&P Global's flash US composite PMI, which captures activity in both the services and manufacturing sectors, came in at 54.5 in May, up from 53.4 in April and better than the 53.0 estimated by economists, marking a 13-month gain for the index.
Separately, new single-family home sales rose 4.1% in April to an annualized pace of 683,000, above the revised rate of 656,000, according to a report from the Census Bureau. That's still 11.8% above the year-ago level and higher than the Bloomberg consensus expectations of 665,000 units for April.
In single stock moves, shares of Yelp Inc. (YELP) rallied over 5% as activist investor TCS Capital Management confirmed its stake in the company and asked the company to explore strategic alternatives including a sale, according to an open letter to the Yelp board of directors on Tuesday.
Lowe's Companies, Inc. (LOW) shares gained more 2% after the home-improvement company cut its full-year sales forecast Tuesday, citing lower demand as high inflation impacts discretionary spending. While Apple (AAPL) said it has entered a multi-billion dollar deal with chipmaker Broadcom Inc. (AVGO) to use chips made in the US. Shares of the tech giant slid more than 1%.
Elsewhere, shares of Dick's Sporting Goods (DKS) moved lower after the company topped its first fiscal quarter sales and earnings while maintaining its outlook for this year
Zoom Video Communications, Inc. (ZM) shares dropped more than 7% after the videoconferencing software company posted a beat on their results for its fiscal first quarter. The company also raised its full-year guidance.
Shares of Pfizer Inc. (PFE) rose after a study showed positive weight-loss results for patients taking the drug maker’s oral diabetes treatment.
BJ's Wholesale Club Holdings, Inc. (BJ) shares declined more than 7% after the retailer reported revenue that came in below analysts' expectations. Comparable club sales not including gasoline were lower than anticipated.
In the meantime, Netflix (NFLX) is cracking down on password sharing in the US. The company broke the news in a blog post Tuesday afternoon.
After the closing bell, Palo Alto Networks, Inc. (PANW), Intuit Inc. (INTU), and Toll Brothers, Inc. (TOL) are expected to report results.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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