U.S. Stocks Give Back Ground Following Recent Upward Move

Stocks moved mostly lower during trading on Tuesday, giving back ground following the strong upward move seen over the past several sessions. The Dow and the S&P 500 remained stuck in negative territory throughout the session, while the Nasdaq spent the day bouncing back and forth across the unchanged line.

The major averages all ended the day in the red, although the tech-heavy Nasdaq edged down just 12.36 points or 0.1 percent to 11,863.90. The Dow slid 157.71 points or 0.6 percent to 28,679.81 and the S&P 500 fell 22.29 points or 0.6 percent to 3,511.93.

The pullback on Wall Street may partly have reflected profit taking after the major averages climbed to their best closing levels in over a month on Monday.

Negative sentiment was also generated in reaction to news that Johnson & Johnson has paused a late-stage trial of its Covid-19 vaccine candidate due to an unexplained illness in a study participant.

Shares of Johnson & Johnson (JNJ) slumped by 2.3 percent on the news even though the healthcare giant reported better than expected third quarter results.

Financial giant JPMorgan Chase (JPM) also moved notably lower despite reporting third quarter results that exceeded analyst estimates.

On the other hand, shares of Disney (DIS) moved sharply higher after the entertainment giant announced a strategic reorganization of its media and entertainment businesses to focus on developing and producing original content for its streaming services.

Uncertainty about a new stimulus bill also weighed on Wall Street, as House Speaker Nancy Pelosi continued her attacks on the White House’s latest offer in a letter to her Democratic colleagues, claiming the proposal “falls significantly short of what this pandemic and deep recession demand.”

“Significant changes must be made to remedy the Trump proposal’s deficiencies,” Pelosi added while saying she remains “hopeful that the White House will finally join us to recognize the needs of the American people.”

With Pelosi and the White House struggling to reach an agreement on a broad relief package, Senate Majority Leader Mitch McConnell has announced the Senate will vote on a more limited stimulus bill.

McConnell said the first order of business when the Senate returns next week will be voting on “targeted relief for American workers,” including new funding for the Paycheck Protection Program.

In U.S. economic news, the Labor Department released a report showing a modest increase in consumer prices in the month of September, with the uptick in prices matching economist estimates.

Sector News

Banking stocks turned in some of the market’s worst performances on the day, dragging the KBW Bank Index down by 2.9 percent. The index pulled back after ending the previous session at its best closing level in nearly four months.

Within the sector, shares of Citigroup (C) tumbled by 4.9 percent even though the banking giant reported third quarter results that exceeded analyst estimates.

Significant weakness was also visible among airline stocks, as reflected by the 2.3 percent slump by the NYSE Arca Airline Index.

Delta Air Lines (DAL) showed a notable move to the downside after reporting a wider than expected third quarter loss on revenues that missed analyst estimates.

Energy stocks also saw considerable weakness on the day even though the price of crude oil for November delivery climbed $0.77 to $40.20 a barrel.

Networking, commercial real estate, brokerage and housing stocks also moved notably lower, while retail and software stocks added to the gains posted in the previous session.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index edged up by 0.2 percent, while China’s Shanghai Composite Index closed just above the unchanged line.

Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index slumped by 0.9 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index slid by 0.6 percent and 0.5 percent, respectively.

In the bond market, treasuries moved notably higher as trading resumed following the holiday on Monday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.8 basis points to 0.727 percent.

Looking Ahead

Another batch of earnings news may attraction attention on Wednesday, with Bank of America (BAC), Goldman Sachs (GS), UnitedHealth (UNH) and Wells Fargo (WFC) among the companies due to report their quarterly results before the start of trading.

Traders are also likely to keep an eye on any developments in Washington regarding a new stimulus bill, while the Labor Department is scheduled to release its report on producer price inflation.

Source: Read Full Article