Market Snapshot: Dow struggles to hold grip on 36,000, but large-cap tech stocks outperform as yields recede

How are stock indexes trading?

• The Dow Jones Industrial Average DJIA, -0.44% traded 147 points, or 0.4%, lower at 35,994.
• The S&P 500 SPX, -0.14% was trading at 4,690, down 11 points, or 0.2%.
• The Nasdaq Composite Index COMP, -0.13% was off 0.4%, or 58 points lower, at 15,914.

On Tuesday, the Dow rose 54 points, or 0.2%, to close at 36,142. The S&P 500 rose 18 points, or 0.4%, to 4,700 and the Nasdaq Composite jumped 120.01 points, or 0.8%, to end at 15,973.

What’s driving markets?

A slight retreat in Treasury yields on Wednesday was helping to cap declines for the broader market and buoying large-cap technology stocks.

Investors, however, were struggling to justify pushing equities to new heights after the Nasdaq Composite and S&P 500 ended Tuesday’s session within a stone’s throw of all-time highs and the Dow industrials hovered 1% from its closing record.

Energy stocks also were under pressure Wednesday after President Joe Biden asked Federal Trade Commission Chair Lina Khan to immediately “consider whether illegal conduct is costing families at the pump,” in a letter. Biden also said there’s “mounting evidence of anti-consumer behavior by oil and gas companies.”

U.S. crude prices retreated below $80 a barrel Wednesday, pressured lower by efforts by Biden to ease prices at the pump, while reports have emerged that the U.S. and Chinese leader Xi Jinping discussed a joint release of crude supplies, in a virtual meeting.

Still, market participants were focused on the spending power of U.S. consumer heading into the holidays, following Tuesday’s better-than-expected October retail sales data and a batch of third-quarter corporate earnings. Data showed retail sales jumped 1.7%, beyond forecasts for a 1.5% rise and the biggest gain since March when households received billions in federal stimulus money.

Shares of Walmart rival Target TGT, -4.71% fell Wednesday, even as the retailer beat quarterly earnings forecasts and lifted its forecasts, but warned about rising costs hurting margins.

Shares of Lowe’s LOW, +1.91% edge higher Wednesday, after the home improvement retailer reported fiscal third-quarter profit and revenue that beat expectations, a surprise increase in same-store sales, and raised its full-year outlook.

Visa V, -6.17% fell sharply after Amazon AMZN, +0.79% said it would stop accepting payments made by its credit cards issued in the U.K. starting next year due to high commissions.  

“While investors are not reversing course from the stock market, rotation in our opinion is to blame for the uneven market performances,” said Peter Cardillo, chief market economist at Spartan Capital, in a note to clients.

Meanwhile, enthusiasm for buying stocks might abate somewhat, as investors position for thinning trading volumes in the last full week of trading before Thanksgiving holidays.

Elsewhere, New York Fed President John Williams warned Wednesday the Treasury market needs to bolstered to prepare for the next big shock, given the “severe disruptions to critical markets” and up to $1 trillion in overnight repo operations it began offering to calm markets early on in the pandemic, in a virtual conference on the Treasury market. Other U.S. central bank speakers include Fed Gov. Michelle Bowman, San Francisco President Mary Daly and Fed President Charles Evans.

Which companies are in focus?

• Rivian Automotive Inc. RIVN, -17.01% stock fell 16%, its first stumble since it took Wall Street by storm last week with its initial public offering.
• Boeing Co.  BA, +0.08%  shares were 0.1% lower after receiving the equivalent of a “buy,” from Wells Fargo, which sees “a positive risk/reward balance with the stock lagging the S&P 500 by (about) 30% since its March high.” 
• Shares of Roku Inc. ROKU, -10.98% are off 10% Wednesday after an analyst downgraded the stock and suggested that investors have misinterpreted the company’s story as of late.
• Moderna Inc. MRNA, +4.02% said Wednesday it has applied for authorization of its COVID-19 vaccine in Canada for children aged 6 to 11.
• Biogen Inc. shares BIIB fell Wednesday, after the company said it had received a “negative trend vote” from an advisory committee to the European Medicines Agency for its Alzheimer’s disease treatment aducanumab.
• Visa Inc.’s stock V dove 5.5% toward a nine-month low, after Amazon.com Inc. AMZN said it would stop accepting Visa credit cards issued in the U.K. next year.
• Pfizer Inc. PFE said Wednesday it’s launching a search for a new chief financial officer because its current CFO Frank D’Amelio will retire.
• Alcoa Corp. AA said Wednesday that it has bought group annuity contracts that will help transfer $1 billion in pension obligations for defined-benefit pension plans for certain retirees and beneficiaries in the U.S.

How are other assets trading?

• The yield on the 10-year Treasury note  TMUBMUSD10Y, 1.606% was 3 basis points lower around 1.61%. Yields and debt prices move in opposite directions.
• The ICE U.S. Dollar Index DXY, -0.12%,  a measure of the currency against a basket of six major rivals, was off 0.2%.
• The Stoxx Europe 600  SXXP, +0.14% closed up 0.1%, while London’s FTSE 100  UKX, -0.49% declined 0.5%.
• The Shanghai Composite  SHCOMP, +0.44% rose 0.4%, while the Hang Seng Index HSI, -0.25% fell 0.2% and Japan’s Nikkei 225 NIK, -0.40% fell 0.4%

Barbara Kollmeyer contributed reporting