Dow Under Pressure as Pre-Election Jitters Weigh on U.S. Stock Market
Equity markets are under pressure again, as a confluence of political, fiscal, and economic risks weigh on investor sentiment. | Image: Spencer Platt/Getty Images/AFP
- The Dow Jones Industrial Average hovered within a narrow range Tuesday, following a 650-point drop on Monday.
- Fading stimulus hopes and a sharp rise in Covid-19 cases are weighing on investor sentiment.
- Corporate earnings, economic data in focus.
The Dow and broader U.S. stock market traded in a narrow range on Tuesday, as investors sifted through a flurry of corporate earnings reports against a backdrop of surging virus cases.
Dow, S&P 500 Fall; Nasdaq Rises
Wall Street’s major indexes opened mixed on Tuesday, reflecting a tepid pre-market session for U.S. stock futures . The majors would eventually turn lower, with the Dow Jones Industrial Average falling 61 points or 0.2%. The broad S&P 500 Index of large-cap stocks declined by 0.1%.
The Nasdaq Composite Index was a notable exception, as the tech-driven average rose 0.3%.
Losses were mainly concentrated in the energy, industrials, and financials sectors . Shares of information technology and consumer discretionary companies rose.
Risk Sentiment Subsides Ahead of Election
Markets declined sharply at the beginning of the week, with the S&P 500 posting its biggest drop in a month on surging Covid cases and a lack of stimulus progress in Washington.
The prospect of a contested election on Nov. 3 also resurfaced after President Trump narrowed his polling gap with Joe Biden. Both candidates continue to campaign for battleground states. Watch the video below:
Attention has shifted back to economic data and corporate earnings on Tuesday, as investors continue to monitor the consequences of Covid-19 lockdowns.
In economic data, U.S. durable goods orders rose for a fifth consecutive month in September, indicating that manufacturing demand was rebounding. Orders for manufactured goods meant to last three years or more increased 1.9% in September, the Commerce Department reported Tuesday .
Orders for nondefense capital goods excluding aircraft–a key proxy for business investment –rose 1%, official data showed.
Corporate earnings are also in the spotlight on Tuesday, as software giant Microsoft reports after the close. So far, 84% of S&P 500 companies have reported better than expected third-quarter earnings , according to FactSet. Still, these companies have reported a blended earnings decline of 16.5%, the worst since 2009.
