President Donald Trump gestures as he returns to the White House on Oct. 5, 2020, in Washington, D.C., after leaving Walter Reed National Military Medical Center, in Bethesda, Md.
APU.S. stock indexes turned sharply lower Tuesday afternoon after President Donald Trump said that he would pause talks on a fiscal stimulus and Covid relief package until after the election. Earlier in the day, reports said that Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi planned to meet and continue negotiating on a bill. That progress had lifted the market in recent sessions.
The Dow Jones Industrial Average closed down 376 points, or 1.3%, after having been up more than 100 points earlier in the day. The S&P 500 fell 1.4% and the Nasdaq Composite lost 1.6%.
Economists and analysts have warned in recent weeks and months that additional fiscal support would be required to keep the U.S. recovery going. Federal Reserve Chair Jerome Powell addressed an economics conference earlier on Tuesday, repeating his recent calls for Congress to pass fiscal stimulus and warning that the consequences of failing to do so could be “tragic.”
After rising to its highest yield since June, the yield on the 10-year Treasury note reversed course to fall two basis points, or hundredths of a percentage point, to 0.742%. The 10-year yielded close to 1.9% in January, before falling to a 0.5% yield during March’s market turmoil.
Low interest rates have helped to boost stocks in 2020, as they made equities relatively more attractive versus bonds and made companies’ future earnings worth more in the present, boosting valuations. Rising bond yields could be a headwind to those factors.
On the other hand, they could also represent investors’ collective view that the economy is improving. That is bullish for stocks, implying flows from bonds to equities and potentially better earnings growth in the future.
The more economically sensitive Russell 2000 index closed down just 0.2% on Tuesday—that’s a bet on a recovery. But defensive utilities were the only sector in the S&P 500 to rise—suggesting the opposite.
“The underlying question is how much can rates backup before stock prices begin to wobble and thereby effectively cap Treasury yields in the medium term,” writes BMO Capital Markets’ Ian Lyngen. “The traditional correlation between higher equities and yields appears to be functioning again; at least in the very near-term—even if assuming it’s a semi-permanent fixture may be folly.”
Overseas on Tuesday, the Nikkei 225 rose 0.5% and the Hang Seng added 0.9%. SMIC, a Chinese chip maker being targeted by the U.S., rose 7% after recent losses.
The Stoxx Europe 600 rose 0.1%, Germany’s DAX added 0.6%, France’s CAC 40 gained 0.5%, and the U.K.’s FTSE 100 ticked up 0.1%.
President Trump left a military hospital on Monday night, to return to the White House residence where he will continue to receive treatment for Covid-19.
Logitech International (ticker: LOGI) dropped 6.1% and Sonos (SONO) fell 7% after Apple (AAPL) stopped selling competitors speakers and headphones, a sign that it might be preparing its own devices. Apple stock declined 2.9%.
Costco Wholesale (COST) shares gave up an earlier gain to slip 0.1% after getting upgraded to Overweight from Equal Weight at Barclays.
Northrop Grumman (NOC) also reversed an earlier rise to fall 1% after getting raised to Outperform from Sector Perform at RBC Capital.
Southwest Airlines (LUV) gave up a 2% rise to fall 2.3% after the company asked employees to take pay cuts and its CEO said he would forgo a salary.
BioNTech (BNTX) jumped 6.1% and Pfizer (PFE) slipped 1.6% after the European Union said it would speed up the process to approve their Covid vaccine.
Alteryx (AYX) soared 28.3% after the data-analytics company raised its sales outlook and named a new CEO on Monday evening.
Suez shares rose 5% in Paris after Veolia Environnement disclosed it has bought a nearly 30% stake in its water-and-waste management rival that it wants to fully buy.
Write to Steve Goldstein at steven.goldstein@wsj.com, Nicholas Jasinski at nicholas.jasinski@barrons.com and Ben Levisohn at Ben.Levisohn@barrons.com
"stock" - Google News
October 07, 2020 at 03:15AM
https://ift.tt/3nnOEWl
Today’s Stock Market Results: Stocks Close Down as Trump Ends Stimulus Talks - Barron's
"stock" - Google News
https://ift.tt/37YwtPr
https://ift.tt/3b37xGF
Bagikan Berita Ini
0 Response to "Today’s Stock Market Results: Stocks Close Down as Trump Ends Stimulus Talks - Barron's"
Post a Comment