Dow snaps longest losing streak in a year

Stocks barely snapped their longest slump in more than a year.The Dow gained 60 points on Wednesday after a fi...

Posted: Apr 26, 2018 5:10 AM
Updated: Apr 26, 2018 5:10 AM

Stocks barely snapped their longest slump in more than a year.

The Dow gained 60 points on Wednesday after a five-day losing streak. The S&P 500 inched higher, but the Nasdaq closed lower for the fifth straight day - its longest skid since November 2016.

Boeing, the best-performing company on the Dow this year, helped the market get back on track. An optimistic forecast lifted Boeing's shares 4%.

Investors hoped corporate earnings season would provide a respite to a fragile market. The Dow has been fighting to claw its way back from correction territory -- down 10% since its record high in late January.

Earnings have been strong: 83% of companies to report on the S&P 500 so far have beaten Wall Street's profit expectations. If that number holds, it would be a record, according to John Butters, senior earnings analyst at FactSet. Around 30% of companies have reported.

But their results have failed to lived up to investors' high expectations, which were raised by corporate tax cuts.

Investors feel "it's not going to get any better" than right now, said Ed Yardeni, president of Yardeni Research.

Related: Boeing earnings are good and getting better

But several forces have caused a "re-balancing of the market" in recent weeks, said Quincy Krosby, chief market strategist at Prudential Financial.

Rising bond yields are putting pressure on stocks. The yield on the 10-year US Treasury note breached 3% for the first time in more than four years Tuesday. Inflation fears have contributed to the run-up in yields. Inflation eats away at the value of fixed bond payments, leading investors to demand a higher yield in return.

Car loans and mortgage prices are linked to the 10-year note, and rising yields will raise borrowing costs for companies and consumers. Investors worry that will slow consumer spending, the backbone of the economy.

Related: Hedge fund manager Kyle Bass: 'There's been a trade war with China since 2001'

Higher bond yields could also become more attractive than volatile stocks for many investors.

The 10-year yield inched up to 3.01% on Wednesday. If the yield marches to 3.05%, it could spark a new wave of selling, Krosby predicted.

"The uncertainty of what will happen next in the bond market is weighing on stocks," Yardeni said.

Higher commodity costs have also jolted investors. Raising production costs could dent profit margins and force companies to take up the price of goods on consumers.

On Tuesday, Caterpillar, an industrial bellwether, warned on its earnings call that margins wouldn't get any higher and the last three months were its "high-water mark" for the year. Caterpillar lost 6% on Tuesday and sent a chill across the market. A 425-point rout on Tuesday pushed the index back into negative territory for the year.

Oil prices have jumped toward $70 a barrel in recent weeks on geopolitical tensions in Syria and Iran. OPEC's production cuts have mopped up a global oil glut that caused prices to crash to $26 a barrel in 2016.

The combination of higher yields and oil prices have heightened expectations of inflation -- and tightening from the Federal Reserve. When inflation rises, that raises the possibility the Federal Reserve will hike interest rates at a faster pace to prevent the economy from getting too hot. The Fed is on track to raise rates for the second time this year in June.

Another alarming sign for investors: the US dollar is at a four-month high. A weak dollar has raised the value of exports for multinational companies, but it has rallied as yields climb.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 343505

Reported Deaths: 7543
CountyCasesDeaths
Hinds23932444
DeSoto23229283
Harrison20527329
Rankin15411291
Jackson15232252
Madison10959227
Lee10719179
Jones9047169
Forrest8723159
Lauderdale7884244
Lowndes7054151
Lamar702989
Lafayette6548124
Washington5595139
Pearl River5196152
Bolivar4954134
Oktibbeha494398
Panola4771112
Warren4728128
Marshall4701106
Pontotoc447773
Union433279
Monroe4330137
Neshoba4281181
Hancock428088
Lincoln4176116
Pike3667113
Leflore3627125
Tate353388
Alcorn350974
Sunflower347694
Scott341176
Adams340988
Yazoo339376
Copiah324968
Simpson322891
Itawamba314680
Coahoma314085
Tippah306568
Prentiss298863
Covington293484
Leake285475
Marion284181
Wayne277543
George272251
Grenada269488
Newton262364
Tishomingo239770
Winston236784
Jasper230648
Stone229637
Attala226373
Chickasaw219060
Holmes200174
Clay197654
Clarke186880
Tallahatchie183742
Calhoun181332
Smith179235
Yalobusha171540
Walthall145748
Lawrence142826
Greene140134
Amite137543
Noxubee135235
Perry133538
Montgomery133044
Carroll126431
Webster121232
Jefferson Davis116734
Tunica114227
Benton106725
Claiborne105331
Kemper102429
Humphreys100133
Franklin87923
Quitman84719
Choctaw82619
Wilkinson78032
Jefferson71328
Sharkey51618
Issaquena1736
Unassigned00

Alabama Coronavirus Cases

Cases: 587405

Reported Deaths: 11536
CountyCasesDeaths
Jefferson853851591
Mobile48932864
Madison37517533
Shelby27280257
Tuscaloosa27171465
Montgomery26172627
Baldwin25399329
Lee17224181
Calhoun15401334
Morgan15170291
Etowah14954370
Marshall13116235
Houston12077293
Elmore10915219
St. Clair10763252
Limestone10725158
Cullman10546205
Lauderdale10255254
DeKalb9508192
Talladega8949188
Walker7793288
Autauga7563114
Jackson7400117
Blount7362139
Colbert6703142
Coffee6365132
Dale5650117
Russell480243
Chilton4771117
Covington4749125
Franklin458181
Tallapoosa4519156
Escambia441383
Chambers3949125
Dallas3743163
Clarke371263
Marion3463107
Pike332579
Lawrence3263100
Winston298773
Bibb290465
Geneva283983
Marengo262467
Barbour250961
Pickens245562
Butler240872
Hale235578
Fayette227065
Henry213945
Monroe202141
Randolph201144
Cherokee199248
Washington185239
Macon170552
Crenshaw168358
Clay166259
Cleburne161345
Lamar151038
Lowndes145455
Wilcox132331
Bullock126542
Conecuh121332
Coosa118329
Perry110528
Sumter110333
Greene99137
Choctaw64425
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The heat wave that controlled our area over the past several days is now behind us. The forecast for the next week looks a bit cooler & less humid.
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