The stock market kept investors on edge Thursday as markets bounced between positive and negative territory throughout the day.
Stocks initially opened lower as investors heard news that Liz Truss resigned as the United Kingdom's prime minister after a short and tumultuous tenure. However, the markets quickly turned higher amid well-received earnings reports from telecom AT&T (T, +7.7%) and tech giant International Business Machines (IBM, +4.7%).
Not all stocks rose after earnings, though, with Tesla (TSLA) slumping 6.7% after the electric car maker said it will likely miss its 2022 deliveries target, blaming "an increase in the cars in transit at the end of the year."
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But the market's midday momentum couldn't be maintained, with stocks reversing course again around lunchtime. The Dow Jones Industrial Average ended the day down 0.3% at 30,333, while the S&P 500 Index (-0.8% at 3,665) and the Nasdaq Composite (-0.6% at 10,614) also chalked up modest losses.
"Quickly looking ahead to tomorrow, it is options expiration so be on the lookout for some additional volume and volatility around the open and the close," says Michael Reinking, senior market strategist at the New York Stock Exchange. "Earnings will once again be in focus. There is no economic data in the U.S., but overnight we get Japan inflation, U.K. retail sales and European Union (EU) consumer confidence." Included in those earnings reports are social media firm Snap (SNAP), which reports tonight, and credit card company American Express (AXP), which will unveil its results ahead of tomorrow's open.
Are Stocks Cheap Enough to Buy?
Are stocks cheap enough to start buying? That's a question many investors may be asking themselves following the S&P 500's nearly 20% decline over the past 12 months.
Answering that question is not an easy task. On one hand, the forward price-to-earnings (P/E) ratio for the S&P 500 is at its lowest point since the March 2020 crash, and technical indicators are pointing to more short-term upside for stocks. But on the other, signs are suggesting the volatility seen throughout 2022 will continue and the stock market has yet to hit a bottom.
"We anticipate that financial markets are likely to continue to trade day-to-day in reaction to economic reports and/or comments by Fed officials," says Scott Wren, senior global market strategist Wells Fargo Investment Institute. "We advise to exercise patience in the near term, and expect potential better opportunities in the broader equity market next year." Read on as we explore what this all means for investors looking for bargains in today's market.
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