U.S. Stocks Move Sharply Lower Amid Uncertainty About Stimulus
(RTTNews) - Stocks showed a lack of direction early in the trading session on Monday but pulled back sharply over the course of the day. The major averages all showed notable moves to the downside after ending last Friday's trading mixed.
The major averages finished the session not far off their worst levels of the day. The Dow tumbled 410.89 points or 1.4 percent to 28,195.42, the Nasdaq plunged 192.67 points or 1.7 percent to 11,478.88 and the S&P 500 slumped 56.89 points or 1.6 percent to 3,426.92.
The weakness that emerged on Wall Street reflected concerns about whether lawmakers in Washington will reach an agreement on a new stimulus bill.
In a post on Twitter, House Speaker Nancy Pelosi's deputy chief of staff Drew Hammill revealed that the Democratic leader spoke with Treasury Secretary Steven Mnuchin for just over an hour on Saturday.
"While there was some encouraging news on testing, there remains work to do to ensure there is a comprehensive testing plan that includes contact tracing and additional measures to address the virus' disproportionate impact on communities of color," Hammill tweeted.
Hammill said that there remains an array of additional differences that must be addressed in a comprehensive manner in the next 48 hours.
"Decisions must be made by the White House in order to demonstrate that the Administration is serious about reaching a bipartisan agreement that provides for Americans with the greatest needs during the pandemic," Hammill said.
On the U.S. economic front, homebuilder confidence climbed to another new record high in the month of October, according to a report released by the National Association of Home Builders.
The report said the NAHB/Wells Fargo Housing Market Index rose to 85 in October from 83 in September. Economists had expected the index to come in unchanged.
"Traffic remains high and record-low interest rates are keeping demand strong as the concept of 'home' has taken on renewed importance for work, study and other purposes in the Covid era," said NAHB Chairman Chuck Fowke.
He added, "However, it is becoming increasingly challenging to build affordable homes as shortages of lots, labor, lumber and other key building materials are lengthening construction times."
Oil stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Oil Index down by 2.3 percent.
The sell-off by oil stocks came amid a modest decrease by the price of crude oil, with crude for November delivery edging down $0.05 to $40.83 a barrel.
Considerable weakness was also visible among gold stocks, as reflected by the 2 percent slump by the NYSE Arca Gold Bugs Index. The weakness in the sector came despite an increase by the price of gold.
Housing, Software and tobacco stocks also saw significant weakness on the day, while airline stocks showed a strong move to the upside.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index jumped by 1.1 percent, while China's Shanghai Composite Index fell by 0.7 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index edged down by 0.1 percent, the German DAX Index dropped by 0.4 percent and the U.K.'s FTSE 100 Index slid by 0.6 percent.
In the bond market, treasuries moved lower on the day, extending the modest drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.7 basis points to 0.761 percent.
Trading on Tuesday may be impacted by reaction to the latest earnings news, with IBM (IBM) and Logitech (LOGI) among the companies releasing their quarterly results after the close of today's trading.
Lockheed Martin (LMT) Philip Morris (PM), Procter & Gamble (PG), and Travelers (TRV) are also among the companies due to report their quarterly results before the start of trading on Tuesday.
The Commerce Department is also scheduled to release its report on new residential construction in the month of September.
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