Before The Bell
Following a two-session run by the bulls, in which the Dow Jones Industrial Average pushed ahead by more than 700 points, in an impressive end-of-month comeback, the stock market began the second session of the week with a modest loss. Concerns about the rising toll of the coronavirus, in which total U.S. deaths now top 207,000 and consequent worries about the poor performance of the economy hit the stock market with a one-two punch.
That setback would never really dissipate, even though there were several half-hearted attempts to rally throughout the day. Indeed, after the first hour of trading, the blue chips would stay in the minus column into the close. In addition to the aforementioned concerns about COVID-19 and the economy, investors were uneasy about last night's unruly debate between the two candidates for President. As the election draws nearer, and the polls show a relatively tight and uncertain race, worries rise.
Meanwhile, notwithstanding the market's unease about the economy's course, there was some good early news on the state of the business recovery, as the Conference Board reported that its monthly survey on consumer confidence had shown a nice rebound in September. Not only did the aggregate index rise during the month, but surveys covering the Present Situations Index and the Expectations Index likewise increased.
All in all, it was a lackluster day for Wall Street, which now shows more than a 3% loss for the month in the Dow now ending. If this deficit is sustained the latest 30-day span would represent the first losing month for the stock market since March. The S&P 500 Index, meantime, is off almost 5% for September, while the NASDAQ, driven by the technology sector is lower by upwards of 6%. All told, the Dow lost 132 points on the day, or about half its worst deficit for the session.
Among individual stocks, Dow components Chevron (CVX) and Travelers (TRV) lost ground. Also lower on the day were former Dow stocks Exxon Mobil (XOM) and Raytheon (RTX). The two oil issues, Exxon Mobil and Chevron, were hurt by tumbling oil prices. Finally, looking ahead to the rest of the week, we will be getting data on manufacturing activity on Thursday, along with metrics on consumer spending and personal income. Then on Friday, the Labor Department will issue its findings on employment.
Ahead of all this and after early gains in the equity futures last evening, the market seems poised to start the current session to the downside.
– Harvey S. Katz, CFA
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
