S&P 500 Update August 2023: Bank Stocks Plunge Following Moody’s Downgrade, Key Movers and Market Insights
On August 8, 2023, the S&P 500 fell 0.4%, driven by a sharp decline in bank stocks after Moody’s downgraded several banks. Discover which companies led gains and losses in this market update.
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Market Highlights
- On August 8, 2023, the S&P 500 decreased by 0.4%, primarily due to banking sector declines following Moody’s downgrade announcements.
- International Flavors & Fragrances experienced the steepest drop after lowering its sales outlook amid reduced consumer spending.
- Eli Lilly led the market rally, boosted by stronger-than-expected quarterly earnings and positive guidance driven by soaring sales of its diabetes medication, Mounjaro.
The S&P 500 edged down 0.4%, pressured by banking stocks after Moody’s downgraded multiple small- and mid-sized banks and cautioned that larger institutions might face similar credit rating cuts. Additionally, the Federal Reserve Bank of New York revealed that U.S. consumer credit card debt surpassed $1 trillion for the first time in history.
Major financial players saw declines with Goldman Sachs (GS) shares falling 2%, Bank of America (BAC) down 1.9%, and Citigroup (C) slipping 1.5%. Regional banks also suffered losses: Citizens Financial Group (CFG) dropped 1.6%, and Fifth Third Bancorp (FITB) declined 1.9%.
International Flavors & Fragrances (IFF) was the worst performer in the index, plunging over 19% after reducing its revenue forecast due to weakened consumer demand. Sealed Air Corporation (SEE) shares fell 9.5%, reflecting decreased product demand, while Expeditors International of Washington (EXPD) shares declined 4.4% amid a 51% revenue drop caused by reduced air and ocean freight tonnage.
Pharmaceutical stocks shined as Eli Lilly (LLY) and Novo Nordisk (NVO) American Depositary Receipts reached record highs, fueled by enthusiasm for their weight-loss treatments. Lilly’s shares surged 14.9% after exceeding earnings expectations and raising guidance, with optimism growing around Mounjaro’s potential for obesity treatment. Organon (OGN) shares rose 9%, supported by increased sales of its oral contraceptive Nexplanon following the Supreme Court’s reversal of Roe v. Wade in the Dobbs v. Jackson Women’s Health Organization decision.
Broadridge Financial Solutions (BR) shares climbed over 6% after the fintech company surpassed profit forecasts and increased its dividend, driven by strong net new business and internal growth.
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