OCT 23 — The S&P 500 and the Nasdaq touched near five-month lows today as the yield on the benchmark US 10-year Treasury note hit the crucial 5 per cent mark, while investors awaited earnings from the world’s largest technology companies and key economic data.

The yield on the 10-year note US10YT=RR touched the July 2007 milestone that it briefly attempted to scale last week. It was last at 4.9758 per cent. Yields on the 2-year and 30-year notes also rose.

“This continued (economic) strength has cast doubt over whether interest rates really have peaked, even if the Fed does still look very likely to leave rates unchanged,” said Rupert Thompson, chief economist at Kingswood Group.

“Upward pressure on yields has also comes from increased concern over the large amount of government debt needing to be absorbed by the market.”

The S&P 500 slipped below 4,200 points, a technical level that markets believe could trigger further losses towards the 4,000 level.

Focus will remain on the largely positive earnings season. Four of the ‘Magnificent Seven’, which have helped power the S&P 500 .SPX higher in 2023 while the other indexes lagged, report later this week.

Of the 86 companies in the S&P 500 that have reported earnings so far in the third quarter, 78 per cent have been above analysts’ estimates, according to the LSEG data.

Chipmaker Intel INTC.O, oil major Exxon Mobil XOM.N, General Motors GM.N are among other major companies set to report results this week.

Investors also kept tabs on tensions in the Middle East after Israel bombarded Gaza and also struck southern Lebanon overnight, in signs that the conflict was spreading.

US GDP print, expected on Thursday, will be closely monitored amid expectations that the economy expanded at a robust 4.2 per cent in the third quarter, which might warrant tighter monetary policy.

Investors will also track the personal consumption expenditure (PCE) price index - the Fed’s preferred inflation gauge - for September at the end of this week.

At 9:38 a.m. ET, the Dow Jones Industrial Average .DJI was down 204.23 points, or 0.62 per cent, at 32,923.05, the S&P 500 .SPX was down 25.94 points, or 0.61 per cent, at 4,198.22, and the Nasdaq Composite .IXIC was down 93.95 points, or 0.72 per cent, at 12,889.86.

All 11 major S&P 500 sub sectors were in the red, with utilities .SPLRCUand energy .SPNY leading losses.

SalesforceCRM.N dipped 2.3 per cent as Piper Sandler downgraded to “neutral” from “overweight”, while pharmacy chain operator Walgreens Boots AllianceWBA.O added 1.5 per cent after J.P. Morgan upgraded it to “overweight”.

ChevronCVX.N fell 3.2 per cent after the energy major said it would buy smaller rival Hess Corp HES.N in a US$53 billion all-stock deal. Hess was up 0.6 per cent.

FMCFMC.N shed 16.7 per cent after the agricultural products supplier lowered its third-quarter revenue and earnings outlook.

Declining issues outnumbered advancers for a 5.24-to-1 ratio on the NYSE and for a 2.95-to-1 ratio on the Nasdaq.

The S&P index recorded 47 new 52-week lows but no new high, while the Nasdaq recorded seven new highs and 223 new lows. — Reuters