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Stock market today: Dow flat in directionless trade as bonds sound recession alarm

Stock Markets Dec 07, 2022 04:07PM ET
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By Yasin Ebrahim

Investing.com -- The Dow closed flat Wednesday, after swinging between gains and losses as the bond market continued to sound the alarm on a recession, souring investor sentiment on stocks.

The Dow Jones Industrial Average rose 1 point, the Nasdaq Composite fell 0.5%, and the S&P 500 fell 0.2%.

The 2-10 Treasury yield curve inverted by 83 basis points, the biggest inversion in about four decades, signaling increasing concerns about a potential recession.  

“As the economy moves toward official recession in the months ahead, we believe the equity markets will start to price in the severity of the recession,” Janney Montgomery Scott said in a note.

Against the backdrop of growing recession fears, big tech continued to struggle, with Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) falling more than 1%.

Travel and leisure stocks were also wounded by fears about the impact of recession on the consumer. Booking Holdings (NASDAQ:BKNG) and Expedia (NASDAQ:EXPE) were down more than 4% and 6% respectively, while Airbnb (NASDAQ:ABNB) fell 1%.

Energy stocks were flat, shrugging off a more than 2% slump in crude following data showing mixed U.S. petroleum data as crude stockpiles fell more than expected, but gasoline inventories surged offsetting somewhat positive news about demand as China eases COVID restrictions.

Schlumberger NV (NYSE:SLB) and Baker Hughes Co (NASDAQ:BKR) fell about 2%, while Halliburton Company (NYSE:HAL) tumbled nearly 3%.

On the earnings front, investors digested mixed quarterly results.

Toll Brothers (NYSE:TOL) reported better-than-expected fourth quarter results even as the housing market was hurt by higher mortgage rates. Its shares jumped more than 7%.

Entertainment company Dave & Buster’s Entertainment (NASDAQ:PLAY) however, fell 7% even as its third-quarter results topped Wall Street estimates.

Lowe’s (NYSE:LOW), meanwhile, bucked the trend to rise more than 2% after reaffirming its full-year guidance and rolling out a new $15 billion stock buyback program.

In a sign of the skittish investor sentiment on risk assets, defensive corners of the market including health care and consumer staples were in favor, with the latter boosted by a surge in Campbell Soup .

Campbell Soup (NYSE:CPB) rose 6% after reporting better-than-expected quarterly results, underpinned by price hikes and supply chain improvements.

In other news, Carvana (NYSE:CVNA) slumped 43% after its largest creditors reportedly agreed to cooperate together in negotiations with the company, adding fears that bankruptcy is looming for the online car dealer.

PayPal (NASDAQ:PYPL) was up 3% after the payments company said that fourth-quarter earnings were running "slightly ahead" of prior guidance amid a boost from cost-cutting efforts. The company previously provided Q4 guidance for adjusted earnings per share in a range of $1.18 to $1.20.

"[O]ur cost controls are probably slightly better than I thought, so I think we'll be slightly ahead on the EPS guidance that we gave [in November]," Dan Schulman said. 

Stock market today: Dow flat in directionless trade as bonds sound recession alarm
 

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Comments (11)
Usman Abubakar
Usman Abubakar Dec 08, 2022 9:44AM ET
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its a risk
vincent li
vincent li Dec 07, 2022 7:01PM ET
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talking heads...how boring
Tom Michaels
Tom Michaels Dec 07, 2022 6:59PM ET
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Crock of bull, wall st losers, get a real job.
Jay Ow
Jay Ow Dec 07, 2022 6:26PM ET
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If they think those bonds will save their 60% inflation with a filthy 4% interest. Not at all.
Jay Ow
Jay Ow Dec 07, 2022 6:21PM ET
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It is a mockery of investors, businesses and people. This situation requires subsidies but not monopolies. Nothing got to the people, so it won't be a recession but a crash. A third of people are already in trouble and have no money. Companies are starting to fail. Unless the markets start to rise. There will be civil wars.
Brad Albright
Brad Albright Dec 07, 2022 6:21PM ET
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Wow! Awesome!
Jay Ow
Jay Ow Dec 07, 2022 6:21PM ET
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Brad Albright  Next few month there will be another third without money. So capitol will be in fire. If they will not change economy politic
Jay Ow
Jay Ow Dec 07, 2022 6:21PM ET
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Brad Albright  Trust what you want, this are economic prognosis
Brad Albright
Brad Albright Dec 07, 2022 6:21PM ET
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Jay Ow No money? Awesome!
MAP SR
MAP SR Dec 07, 2022 4:43PM ET
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come to me if you are overwhelmed
MAP SR
MAP SR Dec 07, 2022 4:43PM ET
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These are son of man's words
Buy And Sell
Buy And Sell Dec 07, 2022 4:39PM ET
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Warning it feels strange now no hint for directions. It can be danger ahead...
Mitchel Pioneer
Mitchel Pioneer Dec 07, 2022 4:39PM ET
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Another absolute JOKE of a day in the criminally manipulated FRAUD, the US Ponzi Scheme.
JIM VETTER
JIM VETTER Dec 07, 2022 4:28PM ET
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The 2-10 treasury yield had been inverted for 6 months. They just now getting it?? If you're holding long term calls in the $SPY, you're toast in 2023
animus advertere
animus advertere Dec 07, 2022 4:22PM ET
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This is about as bearish a narrative these guys will ever give
Simon Meszaros
Simon Meszaros Dec 07, 2022 4:22PM ET
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while most stocks undervalued.
JIM VETTER
JIM VETTER Dec 07, 2022 4:22PM ET
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stocks, in general, are over- valued. P/E prove they are over per historical data
JIM VETTER
JIM VETTER Dec 07, 2022 4:22PM ET
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They're going to be much more bearish in the near future
 
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