thu
JULY 30, 2020 / 4:33 pm
S&P dips on worries about earnings, data, stimulus and
election
DJ: 26,539.57 +160.29 NAS: 10,542.94 +140.85 S&P: 3,258.44 +40.00 7/29
DJ: 26,313.65 -225.92 NAS: 10,587.81 +44.87 S&P: 3,246.22
-12.22 7/30
(Reuters) - The S&P
500 and Dow closed lower on Thursday after data painted a worrying economic
picture on a crucial day for corporate earnings reports, while President Donald
Trump exacerbated investor nervousness by floating the possibility of delaying
the U.S. presidential election. The main
earnings focus on Thursday was on reports from high-flyers including Apple Inc
(AAPL.O), Google parent Alphabet Inc (GOOGL.O)
and Facebook Inc (FB.O) and Amazon.com Inc (AMZN.O). After the bell, shares in Facebook rose 8%
and Amazon climbed 6% following their reports while Alphabet climbed 2%.
Investors also worried about the expiration of enhanced employment benefits on Friday
as U.S. Congress was no
closer to a deal on Thursday to extend or replace the extra
$600-per-week in payments to tens of millions thrown out of work by the
coronavirus. Early in the day
second-quarter Gross Domestic Product (GDP) data showed the U.S. economy suffered its steepest
contraction since the Great Depression, as business activity came to a
halt due to lockdowns aimed at fighting the pandemic. Also jobless claims rose last week, adding to signs the
momentum of economic recovery
has slowed as coronavirus cases spiraled in southern and western U.S.
states.
Shortly after the data, Trump, raised the idea of a delay in elections.
The idea was immediately rejected
by both Democrats and his fellow Republicans in Congress, the branch of
government with the power to make that change.
But the S&P gained ground as the day wore on and closed well
above its session low, which was reached at 1000 EDT. The market stabilized after “opening the
front hall closet and all the stuff comes tumbling out,” said Carol Schleif,
deputy chief investment officer, Abbot Downing in Minneapolis, Minnesota. She
cited the stimulus battle
along with election uncertainty on top of weak data and earnings angst. After the initial knee-jerk reaction, Schleif
said, people stepped back and focused on Federal Reserve Chair Jerome Powell’s
assurance on Wednesday that the central bank would “do whatever it takes” to
support the economy. “You open the door it comes piling out, you’re
frightened and then you settle down and start picking stuff up and putting it
back where it belongs,” she said.
The
Dow Jones Industrial Average .DJI fell 225.92 points, or 0.85%, to 26,313.65,
the S&P 500 .SPX lost 12.22 points, or 0.38%, to 3,246.22 and
the Nasdaq Composite .IXIC added 44.87 points, or 0.43%, to 10,587.81.
The market had gained ground on Wednesday even after the Fed
also said a surge in virus cases was likely stalling the recovery, which will
depend significantly on the virus path. Of
the S&P 500’s 11 major sectors energy .SPSY, materials .SPLRCM, financials
.SPSY and lagged the most. Technology .SPLRCT consumer discretionary .SPLRCD
and communications services .SPLRCS were the only sectors to eke out small
gains.
The tech-heavy Nasdaq was boosted by
Qualcomm Inc (QCOM.O), up 15%, after the chipmaker forecast
fourth-quarter revenue largely above estimates.
But investors were
anxious about earnings from the Nasdaq’s so called four horsemen - Apple and
Amazon, Alphabet and Facebook. Apple was the last to report of the
companies which have a combined market value of about $5 trillion. “When you have a big earnings day you’re
going to have volatility in the market,” said Joe Saluzzi, co-manager of
trading at Themis Trading in Chatham, New Jersey.
Still Wall Street’s main
indexes were headed for their fourth monthly gain in a row, with the benchmark S&P 500 only about 4% below its
February record high. “The markets have
over the past several months been detached from reality and are being fueled by
Fed buying and positive momentum,” said Phil Toews, chief executive officer of
Toews Corp in New York. United Parcel
Service Inc (UPS.N), up 14.4%, soared following its
quarterly results.
Declining issues outnumbered advancing ones on the NYSE by a
1.89-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners. The S&P 500 posted 30 new 52-week highs
and no new lows; the Nasdaq Composite recorded 95 new highs and 27 new lows.
On U.S. exchanges 10.1 billion shares changed hands compared with the 10.47
billion average for the last 20 sessions.
No comments:
Post a Comment