Stock Market News for Oct 21, 2020

Zacks Equity Research
·4-min read

Growing optimism that US lawmakers are nearing a new fiscal stimulus deal helped the benchmarks close in the positive territory on Tuesday.

The Dow Jones Industrial Average (DJI) rose 113.37 points, or 0.4%, to close at 28,308.79 and the S&P 500 edged up 16.2 points, or 0.5% to close at 3,443.12. The Nasdaq Composite Index closed at 11,516.49, adding 37.61 points or 0.3%. The fear-gauge CBOE Volatility Index (VIX) increased 0.6%, to close at 29.35. Advancing issues outnumbered declining ones for 2.13-to-1 ratio on the NYSE and a 1.16-to-1 ratio on the Nasdaq favored advancers.

How Did the Benchmarks Perform?

Of the 11 major sectors of the S&P 500, only the consumer staples sector ended in the negative. The top gainer of the session was the energy sectors increasing 1.1%. Majority of the Dow components closed in the green, with The Travelers Companies, Inc. TRV emerging as the biggest gainer jumping 5.6%. However, a 6.5% decline in shares of International Business Machines Corporation IBM capped gains.

Overall, the S&P 500 posted 25 new 52-week highs and 1 new low, while the Nasdaq Composite recorded 69 new highs and 29 new lows.

Stocks Moved up on Stimulus Talks Progress

On Tuesday, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin held talks on a fresh stimulus deal and made progress in their negotiations. Pelosi had earlier imposed deadline for a deal to happen before the Presidential election. Both Pelosi and Mnuchin were expected to talk on Tuesday afternoon. In an interviewto Bloomberg TV, Pelosi said, that “hopefully by the end of the day, we’ll know where we all are.”

This new stimulus deal negotiations have captivated investors for months now, after the CARES Act expired at the end of July. The Republican-controlled Senate has so far rejected two additional relief bills which were passed by the Democrats. The current Democrats’ bill is worth $2.2 trillion; however, the White House have edged up the offer to $1.8 trillion.

News on stimulus talks, particularly, boosted shares of American Airlines Group Inc. AAL, Carnival Corporation & Plc CCL and Nordstrom, Inc. JWN, up 1.9%, 3.3% and 1.2% on Oct 20.

Homebuilding Accelerates in September

On Tuesday, reports from the Commerce Department underscored that single-family homebuilding raced to a more than 13-year high in September. Housing starts increased 1.9% to a seasonally adjusted annual rate of 1.415 million units last month, surpassing the previous month’s revised figure of 1.388 million units. Additionally, building permits increased by 5.2% to a rate of 1.553 million units in September, surpassing the consensus estimate of 1.522 million and revised figure of 1.476 million. Single-family building permits rose 7.8% to a rate of 1.119 million units, however, multi-family building permits slipped 0.9% to a rate of 434,000 units.

A record-low interest rates and people migrating to the suburbs and low-density areas has boosted the housing market.

Q3 Earnings on Roll

On Tuesday, Lockheed Martin Corporation LMT came out with third-quarter 2020 earnings of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07.The company’s bottom line has also improved 10.4% from the year-ago quarter’s of $5.66. (Read More)

However, despite positive quarterly reports shares of this Zacks Rank #4 (Sell) company declined 3%, yesterday. You can see the complete list of today’s Zacks #1 Rank (Strong Sell) stocks here.

Despite coming out with better-than-expected earnings report, International Business Machines Corporation failed to impress investors, as the company missed revenues. IBM reported third-quarter 2020 non-GAAP earnings of $2.58 per share, which surpassed the Zacks Consensus Estimate by 1.2%. However, revenues came in at of $17.56 billion, which lagged the Zacks Consensus Estimate by 0.3% and declined 2.6% n a year-over-year basis. (Read More)

Shares of The Procter & Gamble Company PG increased 0.4% after the company reported first-quarter fiscal 2021earnings of $1.63 per share, outpacing the Zacks Consensus Estimate of $1.43, a 19% year over year jump. P&G also reported net sales of $19,318 million, increasing 9% year over year and surpassing the Zacks Consensus Estimate of $18,329.8 million. (Read More)

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Click to get this free report International Business Machines Corporation (IBM) : Free Stock Analysis Report The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report Carnival Corporation (CCL) : Free Stock Analysis Report Nordstrom, Inc. (JWN) : Free Stock Analysis Report Lockheed Martin Corporation (LMT) : Free Stock Analysis Report Procter Gamble Company The (PG) : Free Stock Analysis Report American Airlines Group Inc. (AAL) : Free Stock Analysis Report To read this article on click here.