Stock Market Today: Stocks Extend Monthly Losing Streak

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Stocks started Tuesday in negative territory but were trading higher by mid-afternoon. Today's focus was on a steady stream of economic data – including a bigger-than-expected rise in wage growth – which hit as the Federal Reserve kicked off its two-day policy meeting. Corporate earnings reports also drew their fair share of headlines, particularly a dismal outlook from construction giant Caterpillar (CAT).

One of the more notable economic reports released today was the employment cost index (ECI) – a measure of inflation that tracks wage growth – which rose by a higher-than-expected 1.1% from Q2 to Q3. This was larger than the 1% rise seen in Q2, and was the ninth straight quarterly increase in the metric. Year-over-year, the ECI was up 4.3%.

"With the ECI still running north of 4%, labor cost growth remains too high to be consistent with the Fed's 2% inflation target," says Sarah House, senior economist at Wells Fargo. "However, with demand and supply for labor gradually coming back into balance, we expect growth in compensation costs to slow further ahead, with the recent moderation enough to keep the Fed from additional rate increases."

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Meanwhile, The Conference Board said its consumer confidence index fell for a third straight month in October, to 102.6 from September's 104.3.

"[C]onsumers continued to be preoccupied with rising prices in general, and for grocery and gasoline prices in particular," said Dana Peterson, chief economist at The Conference Board, in the report. "Consumers also expressed concerns about the political situation and higher interest rates. Worries around war/conflicts also rose, amid the recent turmoil in the Middle East."

JetBlue nosedives on "staggering" challenges

On the earnings front, Caterpillar reported third-quarter earnings of $5.52 per share on $16.8 billion in revenue – both figures higher than analysts were expecting. However, the blue chip stock sank 6.7% today after the construction equipment manufacturer said it expects "slightly higher" year-over-year fourth-quarter sales growth vs Wall Street's expectations for a 4.8% increase.

JetBlue Airways (JBLU) was another post-earnings loser, spiraling 10.5% today. The air carrier reported a wider-than-expected loss of 39 cents per share. Revenue of $2.35 billion also fell short of estimates. What's more, JetBlue warned of additional losses in the fourth quarter due to a "staggering" amount of air traffic control and weather-related delays.

Pinterest pops on Q3 beat

Not all the earnings news was doom and gloom, though. Pinterest (PINS) shares surged 19.0% after the do-it-yourself social media platform reported top- and bottom-line beats for its third quarter. Additionally, PINS said global monthly users jumped 8% to 482 million.

BofA Securities analyst Justin Post upgraded the communication services stock to Buy from Neutral (the equivalent of Hold), saying the company's Q3 earnings report represents "a bit of an inflection quarter for Pinterest vs peers." Going forward, Post expects more attention to be paid to "renewed advertiser traction and impact of new ad partnerships" – particularly its third-party ad deal with Amazon.com (AMZN, +0.3%).

As for the major indexes, the Nasdaq Composite closed up 0.5% at 12,851, the S&P 500 rose 0.7% to 4,193, and the Dow Jones Industrial Average gained 0.4% to 33,052. Still, all three finished lower for October, marking their third straight monthly decline.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.