4:14PM: 10-year Treasury yield approaches 5%
The Dow closed Wednesday down 333 points, 1%, at 33,665, the Nasdaq Composite slid 219 points, 1.6%, to 13,314 and the S&P 500 dipped 59 points, 1.3%, to 4,315. The small-cap Russell 2000 index declined 37 points, 2.1%, to 1,729.
Investors reacted to the 10-year Treasury yield climbing above 4.9% for the first time since 2007.
“Markets are trying to figure out where rates are going to peak,” said Jamie Cox, managing partner at Harris Financial. “Markets want to see what happens when rates hit 5%.”
United Airlines Holdings fell nearly 10% after the company issued a weaker-than-expected profit forecast for the fourth quarter.
12:00pm: US stocks extend falls, Morgan Stanley (NYSE:MS) tumbles
US stocks extended their falls as the uncertainty in the Middle East prompted a risk-off stance while Morgan Stanley (NYSE:MS) tumbled after reporting a 9% drop in third quarter profit.
At midday, the Dow Jones Industrial Average was down 188.15 points, 0.6%, at 33,809.50, the S&P 500 was down 35.28 points, 0.8%, at 4,337.92 while the Nasdaq Composite was down 117.32 points, 0.9%, at 13,416.43.
"US markets have opened lower as investors switch into risk off mode as the temperature goes up in the Middle East in the wake of the hospital bombing in Gaza," Michael Hewson at CMC Markets said.
United Airlines remains grounded, down 8.2%, after it warning that continued disruption to flights to Israel could dent earnings while an earnings miss at Morgan Stanley's wealth management arm was being blamed for the 7% share price fall at the investment bank.
Still to come, results from Tesland Netflix after the market close.
9:43am: US stocks lower, United Airlines warns of hit from flight disruption
US stocks opened lower as investors digested the latest earnings amid the backdrop of rising tensions in the Middle East.
Shortly after the opening bell, the Dow Jones Industrial Average was down 88.48 points, 0.3%, at 33,909.17, the S&P 500 was down 20.10 points, 0.5%, at 4,353.10 while the Nasdaq Composite was down 75.57 points, 0.6%, at 13,458.17.
United Airlines tumbled 7.0% after it warned the ongoing disruption to flights to Israel would dent earnings, while the raised rhetoric on both sides of the Middle East conflict pushed the oil price higher, a further negative for airlines.
Other airlines fell with Delta Air Lines (NYSE:DAL) down 2.9% and Southwest Airlines Co down 2.2%.
Procter & Gamble (NYSE:PG) fared better, up 3.0%, after it beat expectations as rising prices boosted sales but a drop in deal-making hurt Morgan Stanley (NYSE:MS) which fell 5.8% as profits fell 9%.
In economic news, housing starts in September increased 7% from August, the US commerce department said.
The key driver was an uptick in single family housing starts, up 3.2% in the month and 8.6% from a year earlier.
7:00am: Stocks seen lower as Middle East tensions increase
US stocks are expected to open lower as tensions rise in the Middle East and as another batch of earnings hit the wires.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.4% lower, while those for the S&P 500 fell 0.5%, and contracts for the Nasdaq 100 futures were down 0.6%.
US president Joe Biden has travelled to Israel after an attack on a hospital in Gaza sparked a war of words with both sides of the conflict blaming the other.
The flaming rhetoric saw the oil price jump by around 3%.
Earnings today are due from Tesla, Morgan Stanley (NYSE:MS), Proctor & Gamble and Netflix amongst others.
In economic news, US housing starts are forecast to have risen to an annualised rate of 1.38 million in September from 1.28 million in August.
Investors will also cast an eye on the Beige Book later in the session, the US Federal Reserve’s anecdotal assessment of regional economic conditions gathered by each central bank branch.
Elsewhere, a number of Federal Reserve officials are due to speak.
Philadelphia Federal Reserve President Patrick Harker was quick out of the blocks today, saying rates are at a level where further increases may not be needed.
“This is a time where we just sit for a little bit. It may be for an extended period; it may not. But let’s see how things evolve over the next few months,” Harker told The Wall Street Journal.
Stocks to watch include United Airlines which is down around 5% in pre-market trading after warning that the continued disruption to flights to Israel will hit fourth quarter earnings.
The US carrier said adjusted profit will be $1.80 a share if Tel Aviv flights are grounded through October 31, and $1.50 if the ban lasts through the end of 2023.
United has the most service to Tel Aviv among US-based airlines, accounting for 2% of the carrier’s annual capacity.