Market News

U.S. stocks closed lower on Wednesday amid ongoing geopolitical tensions and a cautious Federal Reserve commentary, with falling crude prices adding to the market pressure. Market participants also evaluated quarterly earnings. All three major indexes ended in negative territory.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.1% or 45.66 points to close at 37,753.31. Notably, 19 components of the 30-stock index ended in negative territory, while 11 finished in positive zone.

The tech-heavy Nasdaq lost 181.88 points or 1.2% to close at 15,683.37.

The S&P 500 declined 0.6% or 29.2 points to end at 5,022.21. Of the 11 broad sectors of the benchmark, seven ended in negative territory, while four ended in the green zone. The Technology Select Sector SPDR (XLK), the Real Estate Select Sector SPDR (XLRE), the Industrials Select Sector SPDR (XLI) and the Consumer Discretionary Select Sector SPDR (XLY) fell 1.4%, 0.8%, 0.5% and 0.5%, respectively, while the Utilities Select Sector SPDR (XLU) advanced 2.1%.

The fear-gauge CBOE Volatility Index (VIX) was down 1% to 18.21. A total of 10.8 billion shares were traded on Wednesday, lower than the last 20-session average of 11.05 billion. The S&P 500 posted 21 new 52-week highs and 103 new 52-week lows. The Nasdaq Composite registered 27 new 52-week highs and 240 new 52-week lows.

Market Volatility Concerns

Federal Reserve Chair Jerome Powell refrained from offering guidance on interest rate cuts, suggesting a preference for maintaining current policies for a longer period. This has lowered hopes for rate reductions.

The recent Beige Book report by the Fed in April raised concerns about a resurgence of inflation, particularly in the manufacturing sector. Market expectations for a rate cut in June have significantly dropped, now standing at a 16% likelihood, according to the CME FedWatch tool. Ongoing geopolitical tensions in the Middle East have continued to impact oil prices, which saw a decline due to U.S. inventories and worries surrounding economic data from China. U.S. crude oil closed at $82.69 per barrel, marking a 3.13% decrease while Brent settled at $87.29 per barrel, with a 3.03% drop.

Mixed Q1 Earnings

United Airlines Holdings, Inc. UAL reported first-quarter 2024 adjusted loss of $0.15 per share, lagging the Zacks Consensus Estimate of $0.53 loss per share. This bank holding company generated total revenues of $12,539 million, surpassing the Zacks Consensus Estimate of $12,428.4 million.

BankUnited, Inc. BKU reported first-quarter 2024 adjusted earnings of $0.64 per share, beating the Zacks Consensus Estimate of $0.62 per share. This bank holding company generated total revenues of $241.73 million, surpassing the Zacks Consensus Estimate by 0.79%.

First Horizon Corporation FHN reported first-quarter 2024 adjusted earnings of $0.35 per share, beating the Zacks Consensus Estimate of $0.34 per share. This bank holding company generated total revenues of $819 million, beating the Zacks Consensus Estimate of $807.9 million.

The Travelers Companies, Inc. TRV reported first-quarter 2024 adjusted earnings of $4.69 per share, missing the Zacks Consensus Estimate of $4.75 per share. This property and casualty company generated total revenues of $11.19 billion, surpassing the Zacks Consensus Estimate by 0.05%.

Consequently, shares of United Airlines Holdings, BankUnited and First Horizon Corp returned 17.5%,2.9% and 1.9%, respectively, while shares of The Travelers Companies fell 7.4%. Each of these companies carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.



Economic Data

For the week ended Apr 12, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.7 million barrels from the previous week.

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