Benchmarks closed sharply lower on Tuesday after President Donald Trump said he would halt coronavirus stimulus negotiations until after the Presidential elections next month.
The Dow Jones Industrial Average (DJI) fell 375.88 points, or 1.3%, to close at 27,772.76 and the S&P 500 shed 47.66 points, or 1.4%, to close at 3,360.97. The Nasdaq Composite Index closed at 11,154.60, declining 177.88 points, or 1.6%. The fear-gauge CBOE Volatility Index (VIX) increased 5.4%, to close at 29.48. Declining issues outnumbered advancing ones for 1.54-to-1 ratio on the NYSE and a 1.37-to-1 ratio on the Nasdaq favored decliners.
How Did the Benchmarks Perform?
Out of 11 major sectors of the S&P 500, only utilities sector ended in the positive territory, closing 0.9% higher for the session. The consumer discretionary sector was the biggest loser on Tuesday, shedding 2.1%, accompanied by sharp decline in communication service, technology and energy that closed nearly 2%, 1.6% and 1.5% lower, respectively.
Majority of the DOW components closed in the red, with The Boeing Company (BA - Free Report) dropping 6.8%, the highest on Oct 6. Boeing carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Sell) stocks here.
The Nasdaq with sharp decline in technology, airlines and healthcare stocks. For the session Electronic Arts Inc. (EA - Free Report) , American Airlines Group Inc. (AAL - Free Report) , eBay Inc. (EBAY - Free Report) and Incyte Corporation (INCY - Free Report) fell at least 4%.
Overall, the S&P 500 posted 31 new 52-week highs and no new lows, while the Nasdaq Composite recorded 114 new highs and 17 new lows.
Trump Halts Coronavirus Stimulus Negotiations
Stocks fell sharply on Tuesday after President Trump tweeted that he has instructed his representatives to halt coronavirus stimulus package negotiation “until after the election”. In his tweet he also stated that “immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.” Before the tweet the Dow was up more than 200 points, as investors hoped for a stimulus package soon, but the tweet sent the Dow as well as the S&P 500 and the Nasdaq down no less than 1.3% for the day.
Airline stocks that had rallied on Monday after House Speaker Nancy Pelosi called on the airline industry to delay furloughs, saying additional relief for the industry is “imminent” fell sharply yesterday. Shares of United Airlines Holdings, Inc. (UAL - Free Report) , Delta Air Lines, Inc. (DAL - Free Report) and Southwest Airlines Co. (LUV - Free Report) were down 3.7%, 2.9% and 2.4%, respectively.
Additionally, on Tuesday the Federal Reserve Chairman Jerome Powell had once again called for additional fiscal stimulus. Powell said that the aid is necessary for the economic recovery to continue and also said if the amount “prove to be greater than needed, they will not go to waste.” Powell believes that the economic recovery will be “stronger and move faster” if the “monetary policy and fiscal policy continue to work side by side to provide support to the economy.”
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>