Stocks end another wobbly day lower as virus cases rise
Wall Street saw losses for the second straight day Tuesday as momentum slows on worries about rising virus counts and Washington’s inability to deliver more aid to the economy.
The Standard & Poor’s 500 index fell 0.3% after spending much of the day swinging between small gains and losses. Most of the stocks in the index fell, particularly banks, oil producers and other companies whose profits tend to track the strength of the economy. Those losses outweighed gains in technology stocks and companies that rely on consumer spending. Traders also welcomed news that AMD has agreed to buy fellow chipmaker Xilinx for $35 billion.
The market’s latest pullback, which follows the S&P 500’s worst day in a month, cuts further into what had been a solid rebound this month after heavy selling in September snapped a five-month winning streak. Just two weeks ago, the S&P 500 was holding on to a 4.4% gain for the month. It’s now on track for a gain of just 0.8%.
The S&P 500 fell 10.29 points to 3,390.68. The Dow Jones industrial average lost 222.19 points, or 0.8%, to 27,463.19. The Nasdaq composite rose 72.41 points, or 0.6%, to 11,431.35.
Caution continues to hang over markets. Coronavirus counts keep climbing at a troubling rate across much of the United States and Europe. The worry is that could lead to the return of lockdowns aimed at slowing the pandemic’s spread, which could further choke off the improvements the economy showed during the summer.
The U.S. economy’s momentum already has slowed after the expiration of supplemental benefits for laid-off workers and other support that Congress approved for the economy earlier this year.
Reports on the economy released Tuesday were mixed. Orders for big-ticket manufactured goods rose 1.9% in September, an acceleration from August’s 0.4% growth and better than economists expected but well below July’s 11.8% rise. Consumer confidence also weakened a bit in October, when economists were expecting it to hold steady.
Investors have been clamoring for Congress to deliver another round of stimulus for the economy, but they’re increasingly acknowledging it won’t happen anytime soon.
House Speaker Nancy Pelosi and Treasury Secretary Steven T. Mnuchin continued their negotiations on a deal Monday afternoon, and a Pelosi spokesman said she’s optimistic an agreement can happen before election day next week. But even if a deal is reached, it could wither in the face of resistance from Republicans controlling the Senate. After confirming the latest Supreme Court justice, the Senate is unlikely to return to session until Nov. 9.
Wall Street’s caution is also apparent in how it’s reacting to corporate profit reports. Through the first two weeks of earnings season, companies that reported better results than expected have not been getting the typical pop in their stock price the day after.
This is the busiest week of earnings reporting season, and the parade of companies delivering better profits than expected for the last quarter continued to grow Tuesday, helping to steady the market somewhat. Merck, Invesco and Laboratory Corp. of America were among the roughly two dozen companies in the S&P 500 reporting earnings for the summer that topped analysts’ expectations. Microsoft also reported quarterly earnings thatbeat Wall Street’s forecasts. The software giant issued its results after the close of regular trading Tuesday. Its shares slipped 0.1% in after-hours trading.
F5 Networks climbed 8.5% for one of the biggest gains in the S&P 500 after it reported better earnings than expected. But 3M fell 3.1% despite likewise reporting stronger results than forecast.
Xilinx jumped 8.6% for the biggest gain in the S&P 500 following the announcement of its all-stock acquisition by AMD.
In another sign of increased caution, Treasury yields retrenched again. The yield on the 10-year Treasury fell to 0.77% from 0.81% late Monday.
European stock markets fell, and Asian markets ended mixed.
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