Wall Street closed mostly lower on Tuesday owing to a record-high resurgence of coronavirus in the United States and Europe. Moreover, possibility of a Congressional deal for the second round of fiscal stimulus before the upcoming presidential election looks bleak. Mixed economic data also dented investors' confidence. The Dow and the S&P 500 ended in the red while the Nasdaq Composite finished in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slipped 0.8% or 221.19 points to close at 27,463.19. Notably, 23 components of the 30-stock index ended in the red while 7 finished in green. The index is 3.8% away to become green year to date. However, the tech-laden Nasdaq Composite finished at 11,431.35, gaining 0.6% due to strong performance by large-cap technology stocks.
Meanwhile, the S&P 500 dropped 0.3% to end at 3,390.68. This was the broad-market index's first close below 3,400 since Oct 6. The Energy Select Sector SPDR (XLE), the Industrials Select Sector SPDR (XLI) and the Financials Select Sector SPDR (XLF) tanked 1.3%, 2.2% and 1.8%, respectively. Notably, nine out of eleven sectors of the benchmark index closed in negative zone and two in positive zone.
For both the S&P 500 and the Nasdaq Composite, major gainer was Xilinx Inc. XLNX that rallied 8.6% following the news that its rival chipmaker Advanced Micro Devices Inc. AMD has agreed to buy the company for $35 billion. Advanced Micro Devices carries a Zacks Rank #2 (Buy). 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 2.7% to 33.35. A total of 8.8 billion shares were traded on Tuesday, lower than the last 20-session average of 9 billion. Decliners outnumbered advancers on the NYSE by a 1.68-to-1 ratio. On Nasdaq, a 1.40-to-1 ratio favored declining issues.
Record New Coronavirus Cases
According to the Johns Hopkins University, daily coronavirus cases in the United States have risen a record high by an average of 69,967 over the past seven days. Per CNBC, more than 20 states reported record-high numbers of average daily new cases. Moreover, new cases are rising by 5% or more in 36 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. Russia also saw a spike in new COVID-19 cases.
No Fresh Fiscal Stimulus in October
Despite three months of negotiations, the U.S. Congress failed to reach an amicable solution regarding the size and the scope of the second round of fiscal stimulus. Chances of a deal to reach before the U.S. presidential election is bleak as Senate Majority Leader Mitch McConnell adjourned the Senate until Nov 9. The first trench of $2.2 trillion stimulus ended on July. Several economic data have indicated that the U.S. economic recovery has slowed in absence of a fresh fiscal stimulus.
The Department of Commerce reported that durable goods orders jumped 1.9% in September from 0.4% in August. The consensus estimate was 0.4%. The core capital goods (orders for non-defense capital goods excluding aircraft) rose 1% in September. August' core capital goods orders were revised upward to 2.1% from 1.9% reported earlier. In absolute terms, the core capital goods orders are now above the pre-pandemic level. Notably, economists used core capital goods orders as a closely watched proxy for business spending plans.
The S&P CoreLogic Case-Shiller National Home Price Index for August rose 5.7% annually compared with 4.8% in July. The 10-City Composite registered a gain of 4.7% compared with 3.5% in the previous month. The 20-City Composite climbed 5.2% year-over-year compared with 4.1% in July.
The Conference Board reported that consumer confidence for October came in at 100.9, missing the consensus estimate of 101.5. Meanwhile, September's data was revised downward to 101.3 from 101.8 reported earlier. The present satisfaction sub-index (that gauges how consumers feel about the economy right now) increased to 104.6 in October from 98.9 in September. The expectations sub-index (gauge that assesses how Americans view the next six months) decreased to 98.4 in October from 102.9 in the previous month.
Stock That Have Made Headline
Concho Q3 Earnings Beat Estimates, Revenues Miss Mark
Concho Resources Inc. CXO reported third-quarter 2020 net income per share (excluding special items) of $1.43, outperforming the Zacks Consensus Estimate of $1.14 as well as the prior-year period’s earnings of 61 cents. (Read More)
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