Dow slides to begin October even as Congress staves off government shutdown: Live updates

The Dow closed slightly lower Monday.

The 30-stock average ticked down about 74 points, or 0.2%. Meanwhile, the S&P 500 inched up 0.01%, while the Nasdaq Composite gained 0.6%.

— Hakyung Kim

Some notable growth stock funds were underperforming the major indexes during Monday's market slump, even as the Nasdaq Composite outperformed.

Cathie Wood's Ark Innovation ETF (ARKK) fell about 2% on the day. The Invesco Solar ETF (TAN) dropped more than 4%.

Some of the larger AI-funds were also slightly underperforming, with the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT) dipping about 1.2%.

— Jesse Pound

Loan volume and demand both are deteriorating while credit standards, particularly in commercial real estate, are tightening, according to a Dallas Federal Reserve survey released Monday.

The closely watched view of the financial system showed that 42% of respondents reported loan volume decreasing while 49.3% saw demand down in September.

On a net basis of those reporting an increase against decrease, the level for volume dropped to -15.9 percentage points while the demand reading was at -34.4 percentage points. That compared to respective August readings of -2.8 and -27.1

Credit standards also showed signs of tightening across sectors, but particularly in the commercial space, which saw a net reading of -30.7 percentage points for banks that saw easing against tightening restrictions. The level was at -22.1 in August.

"Bankers remain pessimistic, with expectations for increasing loan nonperformance, decreasing loan demand and worsening business activity over the next six months," the Dallas Fed stated.

—Jeff Cox

S&P 500 Utilities slumped as much as 5.5% intraday Monday in their worst one-day slide since April 2020 as the yield on the benchmark 10-year Treasury note climbed as high as 4.701%, the highest in 16 years. Utilities, a capital-intensive business that's constantly rolling over debt which in this interest rate environment means a heavier cost burden eating into profits, are on pace for their lowest close since June 2020.

Utilities are far and away the day's worst performers in the S&P 500, with energy stocks trailing a distant second, down 2.1%.

"[Y]ields continue to wreak havoc with Utilities (XLU) having their worst day since Covid" on Monday, Jonathan Krinsky, chartered market technician at BTIG, wrote to clients.

Leading the way for the utilities are NextEra Energy, down 11.8%, AES Corp., lower by 6.3%, PG&E, losing 5.3%, NiSource, off by 5.2% and Dominion Energy, which is weaker by 5%. Every utility in the S&P 500 is lower Monday, none by less than 2.6%.

— Scott Schnipper, Gina Francolla, Michael Bloom

Federal Reserve Vice Chair for Supervision Michael Barr said Monday that he sees higher interest rates staying in place for an extended period of time.

The top banking supervisor noted that there should be more focus on how long rates will need to remain elevated, instead of whether the central bank is going to push through one more hike before the end of the year.

"Given how far we have come, we are now at a point where we can proceed carefully as we determine the extent of monetary policy restriction that is needed," Barr told the Forecasters Club of New York in prepared remarks.

"In my view, the most important question at this point is not whether an additional rate increase is needed this year or not, but rather how long we will need to hold rates at a sufficiently restrictive level to achieve our goals. I expect it will take some time," he added.

Also during the speech, Barr expressed concern over higher-cost funding banks have had to take on this year to make up for lost deposits following the blowup of Silicon Valley Bank in March.

—Jeff Cox

Poor breadth is a bad sign for the S&P 500.

The broad index has slipped about 0.6% in the session. But less than 70 or the slightly more than 500 member stocks traded positively, meaning the lion's share of companies were down in the session.

NextEra led those stocks lower with a loss of nearly 10%. Kellanova and AES followed, with both down more than 6%.

A handful of technology names were among the small group of S&P 500 stocks trading up in the session. Notably, Amazon, Apple, Meta and Alphabet all added more than 1%.

Discover Financial was the best performer in the S&P 500, up more than 5%.

— Alex Harring

Investors should start setting up for 2024 as markets deal with a little more volatility, according to Shannon Saccocia, chief investment officer at NB Private Wealth.

"This fourth quarter could be a setup for complacency and in terms of what happens next," Saccocia said Monday on CNBC's "Halftime Report."

The investment chief was more positive on defensive sectors such as consumer staples and utilities, as well as health care stocks — all areas that underperformed this year. Utilities is off by about 20% this year, and consumer staples is off by roughly 7%. Health care is down by more than 6%.

"Think about the places in your portfolio that you probably are underweight, and add some to that," said Saccocia, adding, "Not that they'll necessarily be the best place to be in December of this year, but looking forward to 2024, we're going to digest these higher rates and reset to our new level. And this is where you're going to want to be when we start to see some of that consumer slowdown."

— Sarah Min

A wave of ether futures ETFs is hitting the market on Monday, expanding the ways investors can use ETFs to bet on cryptocurrencies.

The new funds include:

• BitWise Ethereum Strategy ETF (AETH)
• Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP)
• ProShares Ether Strategy ETF (EETH)
• ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE)
• Bitcoin & Ether Market Cap Weight Strategy ETF (BETH)
• VanEck Ethereum Strategy ETF (EFUT)

The launches could be interpreted as a positive signal about the SEC's approach to spot bitcoin funds, which have had their decision date pushed back by the regulator.

"I do think the approval and launch of these [ether futures] products is a positive sign that we're on the path to spot crypto products in the relatively near future," Bitwise CIO Matt Hougan said.

— Jesse Pound

Detroit automakers are feeling some pain as the United Auto Workers strike enters its third week and additional plants are targeted.

"A ~2-week strike at Lansing Delta, Wentzville (already on strike) and the reported downtime at Fairfax could negatively impact GM's EBIT by an est. ~$0.2 billion, holding all-else-equal, including any additional impacts from the parts/distribution strike," Citi analyst Itay Michaeli wrote in a note Friday. Ford could see the same $0.2 billion hit from a two-week strike in Chicago and its Michigan Assembly plant, he added.

Meanwhile, Bank of America Securities estimates the cumulative impact on earnings before interest and taxes is $163 million for General Motors, $203 million for Ford and $187 million for Stellantis.

"Although there will likely be some volatility as production is taken down, it appears the ultimate increase in labor costs will likely be close to our expectations in January for a 25%-30% cumulative increase over four years," analyst John Murphy wrote in a Friday note. "In isolation, this would be about a 400-500bp headwind to operating margins."

— Michelle Fox

With the resolution of the writers strike and optimism about negotiations with the actors union, Warner Brothers Discovery is poised to exit this period of Hollywood labor strife with little long-term damage, Bank of America analyst Jessica Reif Ehrlich said in a note to clients Monday.

"While the strikes provided a near term benefit to FCF, we are encouraged the industry can return to work, especially for WBD which is among the largest content creators in the industry. For WBD, we expect the company to maintain their recently revised guidance, as it may take several weeks/months to fully ramp content p