Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Stock Market Today: Dow closes lower on rising yields, plunge in American Airlines

Published 2024-05-28, 08:06 p/m
© Reuters
US500
-
DJI
-
COP
-
MRO
-
CRM
-
LCO
-
CL
-
DAL
-
UAL
-
IXIC
-
SAVE
-
DKS
-
AAL
-
HOOD
-

Investing.com-- The Dow closed sharply lower Wednesday, driven by rising Treasury yields and weakness in industrials as airlines stocks fell sharply on concerns about demand after American Airlines cut its profit guidance for Q2. 

At 16:00 ET (20:00 GMT), Dow Jones Industrial Average fell 411 points, or 1.1%, S&P 500 fell 0.8%, and NASDAQ Composite dropped 0.6%. 

Industrials, energy stocks lead downside

Airlines stocks weighed heavily on industrials after American Airlines Group (NASDAQ:AAL) cut its guidance on Q2 profit, sending its shares more than 13% lower.

The downgrade guidance prompted some on Wall Street turn bearish amid worries that American Airlines is struggling to keep up with compettition from low and ultra cost carries.  

"AAL's revenue challenges are likely to persist beyond this summer given escalating ultra-low cost carrier growth at its top hubs," Seaport Research Partners said in Wednesday note as it cut its earnings outlook and downgraded American Airlines shares to neutral from buy. 

Delta Air Lines (NYSE:DAL), and Spirit Airlines (NYSE:SAVE) were also trading lower.

Falling energy stocks, meanwhile, also weighed on the broader sector, shrugging off jump in Marathon Oil Corporation (NYSE:MRO) after the latter agreed to be acquired by ConocoPhillips (NYSE:COP) in a $17.1B all-stock deal.  

US Treasury yields continue climb ahead of PCE data

Treasury yields continued to climb following a series of weaker than expected auction results, signaling weaker demand, for government bonds including the $44B of 7-year notes auctioned Wednesday. 

The move in higher in Treasury yields come ahead of key inflation data this week. PCE price index data, which is the Federal Reserve’s preferred inflation gauge, is due this Friday, and is likely to factor into the central bank’s outlook on interest rates. 

Signs of sticky inflation have led several officials to suggest in recent days that they would like to see more evidence of cooling prices before starting to bring rates down from more than two-decade highs.

Salesforce due to report earnings; Dick's Sporting Goods jumped on beat and raise

The quarterly corporate earnings season is gradually drawing to a close, but Salesforce (NYSE:CRM) is still due to report its fiscal first quarter earnings after the bell, with Wall Street likely on the lookout for updates on the business software group's Data Cloud division.

Dick’s Sporting Goods (NYSE:DKS) stock soared more than 15% after the retailer raised its full-year guidance after customers spent more on new sneakers and athletic gear at its big-box stores.

Robinhood in $1B stock buyback plan, BHP walks away from Anglo deal

Trading platform Robinhood (NASDAQ:HOOD) rose 3% after it unveiled a stock buyback of $1 billion. 

BHP Group Ltd ADR (NYSE:BHP) closed jump below the flatline after deciding to end plans to acquire rival Anglo American (JO:AGLJ) after the latter refused to extend talks beyond a May 29 deadline.

(Peter Nurse, Ambar Warrick contributed to this article.)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.