U.S. stock markets closed lower on Friday, reversing gains from the previous day as COVID-19 cases continued to mount across the United States and Europe. Moreover, investors also remained in the sidelines ahead of the upcoming presidential election on Nov 3. All three major stock indexes ended the day in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) plunged 0.6%, or 157.5 points, closing at 26,501.60, reversing its gains from Thursday. Notably, 17 components of the 30-stock index ended in red while 13 finished the day in green. The blue-chip index is 7.1% below to become green year to date. The tech-heavy Nasdaq Composite closed the day at 10,911.59, down 274 points or 2.5%, on the back of weak performance by large-cap technology stocks, snapping its gains from Thursday.
Meanwhile, the S&P 500 lost 1.2%, closing the day at 3,269.96, giving up its gains from Thursday. The Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select Sector SPDR (XLY) dipped 2.2% and 2.2%, respectively. Notably, nine out of eleven sectors of the benchmark index closed in the negative zone. Major loser of the S&P 500 was Twitter Inc. that plunged 21.1%. Twitter 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 1.1% to 38.02. A total of 10.3 billion shares were traded on Friday. Decliners outnumbered advancers on the NYSE by a 1.83-to-1 ratio. On Nasdaq, a 2.63-to-1 ratio favored declining issues.
Mounting COVID-19 Cases Weigh on Indexes
U.S. markets were rattled by the continued rise in COVID-19 cases. On Oct 29, The United States reported 90,728 new cases, as per the New York Times tracker, with the seven-day moving average hitting 77,865. COVID-19 cases have risen in other countries across Europe, enforcing them to put renewed restrictions in place.
Uncertainty Over Outcome of Presidential Election
Various political experts have predicted that the upcoming presidential election will be a closely contested one. Historically, stock markets have remained volatile in the month before the election. Market participants generally choose to hold cash instead of investing in risky assets like equities while assessing the economic and financial consequences of the election result.
Moreover, arriving at a deal for the coronavirus stimulus package before the election seems even more unlikely with the U.S. Senate now adjourned till Nov 9. Meanwhile, the Democrats have reduced the deal size to $2.2 trillion from $3.4 trillion demanded earlier while the Republicans have raised the deal size to $1.8 trillion from $1 trillion initially offered.
Economic Data
The U.S. Bureau of Economic Analysis reported that personal income increased 0.9% in September after witnessing a fall of 2.9% in August (revised), beating the consensus estimate of 0.2% increase. Personal spending increased 1.4% in September, surpassing the consensus estimate of 1%.
Personal savings rate witnessed an increase of 14.3% from August's revised growth of 14.8%. Disposable personal income also returned to a growth path, reporting an increase of 0.9% after a revised dip of 2.9% in August.
Personal consumption expenditure (PCE) inflation increased 1.2% in September following an increase of 0.7% in August. Core PCE inflation in September increased 0.2% after a 0.3% increase in August, in-line with the consensus estimate of 0.2%.
Per the data released by ISM Chicago, the Chicago PMI dipped to 61.1 in October following an increase of 62.4 in September, but surpassing the consensus estimate of 58.4. This marks the fourth consecutive month of reading of above 50 which indicates an expansion in manufacturing activity.
The U.S. Bureau of Labor Statistics reported that the employment cost index for third-quarter 2020 increased 0.5%, missing the consensus estimate of 0.6% increase, following a 0.5% increase in the April-June quarter.
As per the University of Michigan’s survey, index of consumer sentiment rose to a revised 81.8 in October from 81.2 reported initially, beating the consensus estimate of 81.2.
Weekly Roundup
U.S. stock markets saw major indexes declining during the week as the Dow, the S&P 500 and the Nasdaq Composite dipped 6.5%, 5.6% and 5.5%, respectively. This marked the largest weekly decline for the indexes since March. Spike in COVID-19 infections and upcoming U.S. presidential election are the main reasons for market volatility.
Monthly Roundup
U.S. stock markets witnessed two consecutive months of decline for the first time since March as major indexes closed October with losses. All the three major stock indexes - the Dow, the S&P 500 and the Nasdaq Composite - tumbled 4.6%, 2.8% and 2.3%, respectively.
Rising coronavirus cases across the United States with new restrictions being imposed across Europe, stalled talks regarding a new fiscal stimulus package and uncertainty over the upcoming presidential elections have contributed to the volatility.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Image: Bigstock
Stock Market News for Nov 2, 2020
U.S. stock markets closed lower on Friday, reversing gains from the previous day as COVID-19 cases continued to mount across the United States and Europe. Moreover, investors also remained in the sidelines ahead of the upcoming presidential election on Nov 3. All three major stock indexes ended the day in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) plunged 0.6%, or 157.5 points, closing at 26,501.60, reversing its gains from Thursday. Notably, 17 components of the 30-stock index ended in red while 13 finished the day in green. The blue-chip index is 7.1% below to become green year to date. The tech-heavy Nasdaq Composite closed the day at 10,911.59, down 274 points or 2.5%, on the back of weak performance by large-cap technology stocks, snapping its gains from Thursday.
Meanwhile, the S&P 500 lost 1.2%, closing the day at 3,269.96, giving up its gains from Thursday. The Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select Sector SPDR (XLY) dipped 2.2% and 2.2%, respectively. Notably, nine out of eleven sectors of the benchmark index closed in the negative zone. Major loser of the S&P 500 was Twitter Inc. that plunged 21.1%. Twitter 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 1.1% to 38.02. A total of 10.3 billion shares were traded on Friday. Decliners outnumbered advancers on the NYSE by a 1.83-to-1 ratio. On Nasdaq, a 2.63-to-1 ratio favored declining issues.
Mounting COVID-19 Cases Weigh on Indexes
U.S. markets were rattled by the continued rise in COVID-19 cases. On Oct 29, The United States reported 90,728 new cases, as per the New York Times tracker, with the seven-day moving average hitting 77,865. COVID-19 cases have risen in other countries across Europe, enforcing them to put renewed restrictions in place.
Uncertainty Over Outcome of Presidential Election
Various political experts have predicted that the upcoming presidential election will be a closely contested one. Historically, stock markets have remained volatile in the month before the election. Market participants generally choose to hold cash instead of investing in risky assets like equities while assessing the economic and financial consequences of the election result.
Moreover, arriving at a deal for the coronavirus stimulus package before the election seems even more unlikely with the U.S. Senate now adjourned till Nov 9. Meanwhile, the Democrats have reduced the deal size to $2.2 trillion from $3.4 trillion demanded earlier while the Republicans have raised the deal size to $1.8 trillion from $1 trillion initially offered.
Economic Data
The U.S. Bureau of Economic Analysis reported that personal income increased 0.9% in September after witnessing a fall of 2.9% in August (revised), beating the consensus estimate of 0.2% increase. Personal spending increased 1.4% in September, surpassing the consensus estimate of 1%.
Personal savings rate witnessed an increase of 14.3% from August's revised growth of 14.8%. Disposable personal income also returned to a growth path, reporting an increase of 0.9% after a revised dip of 2.9% in August.
Personal consumption expenditure (PCE) inflation increased 1.2% in September following an increase of 0.7% in August. Core PCE inflation in September increased 0.2% after a 0.3% increase in August, in-line with the consensus estimate of 0.2%.
Per the data released by ISM Chicago, the Chicago PMI dipped to 61.1 in October following an increase of 62.4 in September, but surpassing the consensus estimate of 58.4. This marks the fourth consecutive month of reading of above 50 which indicates an expansion in manufacturing activity.
The U.S. Bureau of Labor Statistics reported that the employment cost index for third-quarter 2020 increased 0.5%, missing the consensus estimate of 0.6% increase, following a 0.5% increase in the April-June quarter.
As per the University of Michigan’s survey, index of consumer sentiment rose to a revised 81.8 in October from 81.2 reported initially, beating the consensus estimate of 81.2.
Weekly Roundup
U.S. stock markets saw major indexes declining during the week as the Dow, the S&P 500 and the Nasdaq Composite dipped 6.5%, 5.6% and 5.5%, respectively. This marked the largest weekly decline for the indexes since March. Spike in COVID-19 infections and upcoming U.S. presidential election are the main reasons for market volatility.
Monthly Roundup
U.S. stock markets witnessed two consecutive months of decline for the first time since March as major indexes closed October with losses. All the three major stock indexes - the Dow, the S&P 500 and the Nasdaq Composite - tumbled 4.6%, 2.8% and 2.3%, respectively.
Rising coronavirus cases across the United States with new restrictions being imposed across Europe, stalled talks regarding a new fiscal stimulus package and uncertainty over the upcoming presidential elections have contributed to the volatility.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>