Stocks Dip Following Mixed Retail and Housing Data…..

U.S. equities finished modestly lower, but remained at arms’ length of record highs, with the markets offering mixed reactions to another dose of retail earnings. Target Corporation topped Q3 expectations and raised its full-year same-store sales forecast, though its gross margin declined due to the supply chain and labor challenges. However, Lowe’s Companies reported and forecasted margin expansion after its Q3 results topped expectations. The economic calendar was dominated by housing data, with October housing starts coming in below forecasts and mortgage applications declining, but building permits rising more than expected. Treasuries were higher, pressuring yields, and the U.S. dollar dipped. Crude oil prices fell, and gold gained ground. Europe finished mixed following a host of inflation reports, with U.K. pricing pressures coming in hotter than expected, while Asia also diverged following some disappointing Japanese economic data.

The Dow Jones Industrial Average declined 211 points (0.6%) to 35,931, the S&P 500 Index decreased 12 points (0.3%) to 4,689, and the Nasdaq Composite lost 52 points (0.3%) to 15,922. In moderate volume, 3.9 billion shares of NYSE-listed stocks were traded and 4.9 billion shares changed hands on the Nasdaq. WTI crude oil tumbled $2.40 to $78.36 per barrel. Elsewhere, the gold spot price advanced $13.60 to $1,867.70 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—dipped 0.1% to 95.80.

Housing starts for October dipped 0.7% month-over-month (m/m) to an annual pace of 1,520,000 units, below the Bloomberg consensus forecast of 1,579,000 units, and compared to September’s negatively-revised pace of 1,530,000 units. However, building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, rose 4.0% m/m at an annual rate of 1,650,000 units, north of expectations calling for 1,630,000 units, and compared to the downwardly-revised 1,586,000 unit pace in September.

The MBA Mortgage Application Index declined 2.8% last week, following the prior week’s increase of 5.5%. The drop came as a 5.1% fall for the Refinance Index more than offset a 1.5% rise for the Purchase Index. The average 30-year mortgage rate rose 4 basis points (bps) to 3.20%.

Treasuries were higher, as the yield on the 2-year note was down 3 bps to 0.50%, while the yields on the 10-year note and the 30-year bond decreased 4 bps to 1.59% and 1.98%, respectively.

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