Stock Market Today: Dow Slips From Highs, Target and Visa Shares
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It remains to be seen whether Federal Reserve Chair Jerome Powell will be renominated.
Olivier Douliery/AFP/Getty Images
Stocks were falling on Wednesday after Treasury Secretary Janet Yellen said the government could fail to meets its financial obligations this year.
In midday trading, the
Dow Jones Industrial Average
fell 176 points, or 0.5%, after the index climbed 54 points Tuesday to close at 36,142. The
S&P 500
—which remains just shy of its record high—was down 0.1%. The
Nasdaq Composite
was little changed.
Yellen said that the government could fail to meet its obligations by Dec. 15 if Congress does not raise the debt ceiling. Part of the concern is a transfer the government will have to make soon related to the $1 trillion infrastructure bill President Biden signed this week.
That’s certainly a concern for markets, but it’s likely to subside as the government is expected to resolve the issue soon. “The market knows that Washington, D.C. waits until the last minute,” said Dave Wagner, portfolio manager and analyst at Aptus Capital Advisors. “There’s volatility surrounding that entire event.”
Credit markets are also sending a negative signal about corporate profits. The
iShares iBoxx High Yield Corporate Bond
Exchange-Traded Fund (HYG) has seen its share price fall 0.9% since Nov. 5, when it hit a more than one-month high. That means investors are moving out of risky corporate bonds, which indicates less confidence in companies’ ability to repay debts. Plus, credit spreads—the extra yield investors demand for buying risky credit over safe government bonds—have widened; a high yield bond index from Bank of America now shows a spread of 3.1 percentage points, up from 3.08 earlier this month, according to the St. Louis Fed.
“These are worrisome trends,” wrote NatAlliance Securities’ Andrew Brenner.
Elsewhere, U.K. inflation was higher than expected. Prices rose 4.2% year-over-year, against expectations of 3.9% and higher than the previous reading of 3.1%. That could make the Bank of England, which had recently said it will hold off on raising interest rates, more compelled to hike.
Overseas, Tokyo’s
Nikkei 225
declined 0.4%. The
FTSE 100
fell 0.5% in London, underperforming other European indexes.
Here are seven stocks on the move Wednesday:
Visa
(ticker: V) stock dropped 5.5%…
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