Before The Bell
September certainly is living up to its reputation as a difficult month for the stock market. On point, after several weeks of losses heading into the current five-day span, the bulls have had an increasingly trying stretch over the past three sessions. Specifically, after the Dow Jones Industrial Average had fallen to an intraday setback of as much as 950 points early Monday, before making back almost half of that deficit, the market staged a modest recovery on Tuesday before tumbling anew yesterday.
In truth, the latest session started out on a mildly positive note, with the blue chips in the plus column for the first hour or so. That key index then dipped cautiously into the red until just after one in the afternoon on the East Coast. Subsequently, however, the bottom would fall out with a progressively larger decline unfolding as the session wound down, until the Dow would conclude matters with a loss of 525 points, ending near the worst levels of the day.
Meanwhile, the losses would be proportionately larger on the tech-heavy NASDAQ, which would drop by 331 points, pushed lower by sizable losses in electric carmaker Tesla (TSLA), which would plummet 44 points, or more than 11%, extending a downtrend in place for the past couple of weeks. In addition to technology stocks, energy issues also fell back in spite of somewhat higher oil prices, with former Dow component Exxon Mobil (XOM) moving lower on the day to back below $35 a share.
Essentially, U.S. stocks could not keep Tuesday's positive momentum in place, with concerns about increasing political uncertainty, ranging from the upcoming election to the bitter debate about the possible adoption of fiscal stimulus measures to fight the COVID infection-19. Meantime, the stock market again watched as Federal Reserve Chair Jerome Powell addressed the Congress as he had on Tuesday. As before, he reiterated the Fed's commitment to supporting the economy in a difficult time.
In other news on the day, crude oil, as noted, inched higher by pennies, while gold prices sputtered after strong recent gains that had lifted the precious metal above $1,900 an ounce. The dollar rose slightly. Among issues going against the grain on the day, we saw NIKE (NKE) shares climb on solid quarterly results. Also, Dow member Johnson & Johnson (JNJ) posted a share increase after announcing that its experimental COVID-19 vaccine had entered the final stage of testing in the United States.
In sum, after yesterday's significant selloff, the equity futures initially pressed lower last evening, and now as we approach a new day and session, the futures are suggesting a generally uncertain opening when trading resumes.
– Harvey S. Katz, CFA
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
