Stock Market News for Oct 15, 2020
Wall Street closed lower for second consecutive days as expectations for a fresh round of fiscal stimulus seems unlikely before the upcoming election. Moreover, market participants remained sidetracked as U.S. presidential election is less than three weeks away. All the three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.6% or 165.81 points to close at 28,514.00, maintaining a 2-day losing streak. Notably, 20 components of the 30-stock index ended in the red while 10 finished in green. Major loser of the Dow was UnitedHealth Group Inc.UNH that lost 2.9%. UnitedHealth carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Moreover, the tech-laden Nasdaq Composite finished at 11,768.73, dropping 0.8% due to the weak performance by large-cap technology stocks. The tech-heavy index has declined for two successive days.
Meanwhile, the S&P 500 dipped 0.7% to end at 3,488.67, continuing the 2-day losing run. The Communication Services Select Sector SPDR (XLC), the Real Estate Select Sector SPDR (XLRE) and the Consumer Discretionary Select Sector SPDR (XLY) fell 1.2%, 1.2% and 1.1%, respectively. Notably, eight out of eleven sectors of the benchmark index closed in negative zone and three in the green.
The fear-gauge CBOE Volatility Index (VIX) was up 1.3% to 26.40. A total of 8.2 billion shares were traded on Wednesday, lower than the last 20-session average of 9.6 billion. Decliners outnumbered advancers on the NYSE by a 1.51-to-1 ratio. On Nasdaq, a 1.95-to-1 ratio favored declining issues.
Uncertainty on Fresh Fiscal Stimulus
U.S. Treasury Secretary Steven Mnuchin expressed concerns that the second round of coronavirus-aid package is unlikely to come before the U.S. presidential election scheduled on Nov 3. The Democrats have settled for $2.2 trillion stimulus while the White House approved only $1.8 trillion.
It is not clear whether a deal will arrive before the U.S. presidential election scheduled on Nov 3, though House speaker Nancy Pelosi said she is still hopeful for a deal. Meanwhile, the Republic-controlled Senate leader Mitch McConnell said he will release a separate stimulus proposal worth just $500 billion. President Donald Trump has already rejected this proposal.
Upcoming U.S. Presidential Election
The U.S. presidential election is less than a month away. Historically, stock markets have remained volatile during the month before the election. Market participants generally choose to hold cash instead of investing in risky assets like equities while assessing the economic and financial consequences of the election result.
The Department of Labor reported that the Producers Pride Index (PPI) increased 0.4% in September beating the consensus estimate of 0.2%. In August, PPI increased by 0.3%. Year over year, PPI increased 0.4%, marking its first increase since March.
The core PPI (excluding food, energy and trade services) also rose 0.4% in September surpassing consensus estimate of 0.2%. In August, core PPI increased by 0.3%. Year over year, core PPI increased 0.7%, reflecting its largest increase since March.
Stocks That Made Headline
With coronavirus continuing to wreak havoc on the airline space, United Airlines Holdings Inc. UAL became the second carrier after Delta Air Lines Inc. DAL to report a loss for the third quarter of 2020. (Read More)
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