Investing.com — The S&P 500 fell sharply Tuesday as signs of worry washed over bank stocks after credit rating agency Moody’s downgraded the debt ratings on a slew of U.S. banks on concerns about pressures on profit.
The fell 0.6%, the fell 0.6%, or 221 points, and fell 0.9%.
Bank leads financials lower as Moody’s cuts ratings on several banks
Moody’s downgraded the ratings of 10 banks by one notch and placed six banks including US Bancorp (NYSE:), and State Street (NYSE:) on review for downgrades.
The ratings agency said second-quarter results from the banks showed “growing profitability pressures that will reduce their ability to generate internal capital.”
Bank of America Corp (NYSE:), Huntington Bancshares (NASDAQ:), and Citizens Financial (NYSE:) were among the top declines falling 3%.
Big tech, chip stocks slip as Treasury Yields Climb
Big tech including Meta Platforms Inc (NASDAQ:) and Microsoft (NASDAQ:) were a drag on tech as recent concerns about valuation and a rise in Treasury yields persist.
As well as weakness in big tech, a more than 1% fall in semiconductor stocks was paced by declines in Advanced Micro Devices Inc (NASDAQ:), Marvell Technology Group Ltd (NASDAQ:) and Novanta.
Novanta Inc (NASDAQ:) fell more than 11% after the semiconductor equipment maker cut its annual guidance as headwinds including reduced IT infrastructure spending and weakness in China are expected to intensify in the second half of the year.
Chegg rides AI wave on earnings stage, Beyond Meat disappoints
Chegg Inc (NYSE:) a beat on quarterly revenue and stoked investor optimism by detailing plans to make a further push into generative artificial intelligence to ward off the threat from ChatGPT. Its shares were up more than 5%.
Some on Wall Street, however, want to see further evidence that a further push into AI will help demand rebound as the widespread use of AI tools such as ChatGPT poses a threat to Chegg’s business.
“While we agree that embracing generative AI aggressively and immediately is the right call and will likely result in a bigger market opportunity and an even better user experience, the reduced near-term visibility is keeping us on the sidelines,” Barrington Research said in a note.
Beyond Meat Inc (NASDAQ:) fell more than 16% after the plant-based meat company reported second-quarter that fell short of estimates as demand for plant-based meat waned in the U.S.
“Given Beyond Meat’s focus on cutting costs, we think it will be increasingly hard for the company to invest the necessarily level to spur demand on their own and will thus need assistance from competitors,” UBS said in a note.
Dish rallies on merger fever
DISH Network Corporation (NASDAQ:) said it would merge with satellite operator EchoStar to create a wireless connectivity company valued at about roughly $6 billion.
The move, which reunites the two companies following the spinoff of Dish from Echostar (NASDAQ:) in 2008, will combine Dish’s satellite, streaming services and 5G network with EchoStar’s satellite infrastructure.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
