Traders work on the floor of the New York Stock exchange during morning trading on November 10, 2023 in New York City.
Michael M. Santiago | Getty Images
The Dow Jones Industrial Average rose on Monday, as traders tried to move past Moody’s Investors Service lowering its U.S. credit rating outlook to negative from stable.
The 30-stock index added 44 points to gain 0.13%. The S&P 500 slipped 0.04%, while the Nasdaq Composite shed 0.12%.
Leading the S&P 500 gains were DaVita, Insulet and Henry Schein, each up more than 7%. Shares of Boeing added more than 4% after Emirates announced a $52 billion order for 95 aircraft, giving the Dow a lift.
Moody’s on Friday underscored the U.S.’ “very large” fiscal deficits and partisan gridlock in Washington as contributing factors for the cut. The ratings agency reaffirmed America’s credit rating at AAA, the highest level. This comes three months after Fitch lowered the U.S. long-term foreign currency issuer default rating to AA+ from AAA, also citing expected fiscal deterioration, an increasing debt burden and political standoffs on fiscal and debt issues.
Treasury yields were flat despite the negative outlook, helping traders also look past the downgrade in the equity market. Stocks fell on the news earlier Monday morning before recovering.
“We’re seeing investor reaction to the Moody’s downgrade, but we’re also seeing skittishness around some big developments pending this week. We think all eyes are focused on this week’s inflation data and the resulting Fed policy,” said Greg Bassuk, CEO of AXS Investments.
With that in mind, Bassuk expects market volatility to continue through the end of the year, especially given the ongoing wars overseas. That, combined with mixed economic data, “have resulted in the Grinch fueling the Christmas rally this year.”
Investors are awaiting the release of fresh U.S. inflation data this week, with the latest reading on the consumer price index slated for release Tuesday.
