Stock Market News for Oct 26, 2020
Wall Street closed mixed on Friday buoyed by mixed news on a fresh fiscal stimulus. Moreover, a third wave of coronavirus infections has grabbed several regions of the United States and Europe. The S&P 500 and the Nasdaq Composite ended in the green while the Dow finished in the red. For the week as a whole, all three major stock indexes closed in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.1% to close at 28,335.57. Notably, 15 components of the 30-stock index ended in the red while 14 finished in green and 1 remained unchanged. The index is 0.7% away to become green year to date. Meanwhile, the tech-laden Nasdaq Composite finished at 11,548.28, gaining 0.4% due to the strong performance by large-cap stocks. The tech-heavy index moved northward for two successive days.
Moreover, the S&P 500 rose 0.3% to end at 3,465.39, continuing the 2-day winning run. The Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) gained 0.9% each. Notably, nine out of eleven sectors of the benchmark index closed in positive zone and two in the red.
Intel Corp. INTC was the major loser for all three above-mentioned indexes. The stock price of the Zacks Rank #3 (Hold) company plunged 10.6% after it reported adverse sales mix in favor of low-margin chips in the third quarter of 2020. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was up 2% to 27.55. A total of 7.79 billion shares were traded on Friday, lower than the last 20-session average of 9 billion. Advancers outnumbered decliners on the NYSE by a 1.61-to-1 ratio. On Nasdaq, a 1.28-to-1 ratio favored advancing issues.
Mixed Signal on Fresh Fiscal Stimulus
House speaker Nancy Pelosi remained hopeful for a Congressional deal for the second round of fiscal stimulus to reach before the U.S. presidential election scheduled on Nov 3. However, Larry Kudlow, director of the White House’s National Economic Council, said it would be very difficult to reach a deal in next few days.
Despite intense negotiations between the White House and the Democrats, the U.S. Congress is unable to reach a deal regarding the size and the scope of a fresh round of fiscal stimulus. The Democrats have settled for $2.2 trillion stimulus while the White House approved only $1.8 trillion. Last week, President Donald Trump said that he is ready to raise the size of the aid-package. However, Senate Republicans have vehemently opposed the package.
Resurgence of Coronavirus
Several states and regions in the United States and major Eurozone countries have recently witnessed another spike in COVID-19 infections as these economies are trying to return to normalcy.
As per Johns Hopkins University Data, the United States has reported more than 71,600 new coronavirus cases on Oct 22. Coronavirus cases grew by 5% or more over the past week in 38 states. In Europe, the government of France has declared a public health state of emergency and the U.K. government is mulling a second national lockdown.
For the Week, the Dow and the S&P 500 were down 1% and 0.5%, respectively. Both indexes recorded first weekly lost after three straight-week of rallies. The Nasdaq Composite lost 1.1%, marking its first weekly lost after four straight-week of gains. Uncertainty regarding a new trench of fiscal stimulus was the primary reason for stock market volatility in last week.
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