Before The Bell
To this point, at least, September has lived up to its reputation as a difficult month for investors. Thus, after a short-lived two-day advance to start the 30-day span, Wall Street has spent the following three weeks heading notably lower, with the past several days being especially trying, with declines of over 500 points in the Dow Jones Industrial Average on Monday and Wednesday alone. Then, yesterday morning, the stock market fell further initially, with the Dow dropping by more than 200 points.
But this latest setback was brief and soon the major averages, including the Dow and the tech-heavy NASDAQ would be back in the plus column for a spell. But the blue chips would reverse course once more and would head lower after the first hour, before again reversing course in a continued run of elevated volatility. Behind the further ups and downs are concerns about the rising toll of COVID-19 with the death total now above 203,000. Worries about the coming election were a factor, too.
Then, too, there is the economy. Here, yesterday morning featured some additional sobering news on the business backdrop, as the Labor Department reported that 870,000 more American had filed for unemployment benefits in the latest seven-day stretch. That metric has shown no improvement for weeks. The total of such filings remains about four times what is was before the pandemic struck. In other, more upbeat data, the government reported that new home sales rose 4.8% in August.
That latest housing report was easily better than expectations, which had been for a 1% decline. The number of new homes sold of just over one million, also was a 14-year high. As for individual stocks in the early going, shares of electric car maker Tesla (TSLA) fell initially, dropping back to $351 before righting itself and climbing back over $380. It would close above $387. Earlier this month, it traded at $502. Also, two major tech names, Apple (AAPL) and Microsoft (MSFT) rose in late-morning dealings.
Meanwhile, the market would continue to improve for most of the afternoon, with the Dow rising to a gain north of 300 points after 1:00 PM (EDT). Thereafter, pressures returned and stocks began a move lower lasting through much of the remainder of the session. In fact, at one point, the Dow would fall into negative territory, as would the NASDAQ, before both indexes returned to the green. But the final tally was uninspiring, with the blue chips and the NASDAQ up just 52 and 39 points, respectively.
Finally, in after-market dealings, the futures initially showed modest upward action. However, ahead of the open this morning, the latest activity in the U.S. equity futures points to a lower start when trading resumes. It seems likely that volatility will again be on display.
– Harvey S. Katz, CFA
At the time of this article's writing, the author had positions in AAPL.
