Before The Bell
It has been a seesaw week on Wall Street to date in a thoroughly inconsistent year. On point, we saw some notable backtracking in the popular averages on Monday and a little relief on Tuesday, although the gains were whittled away by the close. The big issue at hand thus far has been the effort to get a new stimulus deal in hand. As yet, no deal has been brokered.
Specifically, after weeks of interparty wrangling ahead of the November 3rd election, House Speaker Nancy Pelosi imposed a 48-hour deadline on the talks, which expired on Tuesday night with no deal. But the two sides agreed to continue talking and there was some hope at press time that a deal could be reached.
So, yesterday, with the talks proceeding, equities waxed and waned for much of the day. Early on the market was higher, with the Dow Jones Industrial Average up by as many as 140 points at 11:00 AM (EDT). Then, with no deal at hand and the Senate Majority leader suggesting that he might want to wait to vote on a package until after the election, the indexes turned south for a while, but with little conviction.
By early afternoon, the Dow was off modestly, while the S&P 500 Index and the NASDAQ were about even. As to individual stories, shares of Netflix (NFLX) fell rather sharply following its lackluster quarterly release, while the stock of semiconductor giant Texas Instruments pulled back a bit as well even though the tech company surpassed profit and revenue targets in the quarter.
Much of the Street's attention, though, was focused on the stimulus talks, with a comprehensive deal hardly a given before Election Day. As to other news, the economic calendar was light yesterday, one day after the government reported solid numbers on housing starts and building permits. As to the day ahead, we will be getting data on the leading indicators and sales of existing homes.
But the main focus will be on Washington, both with respect to stimulus talks and the upcoming election now less than two weeks away. How well the talks proceed will determine the likely course of trading in the days ahead and the up-and-down sentiment could make for some further volatile trading.
Finally, after this listless movement through much of the session, the final few hours of the trading day saw further up-and-down action, with several attempts to rally, but to no avail. At the conclusion of the session, the Dow would be down by 98 points, while losses of eight and 32 points would be registered by the S&P 500 Index and the tech-heavy NASDAQ.
As to the day ahead, with no stimulus deal yet in the works, the futures suggest that stocks will open with little change when trading resumes. In some after-the-bell action, a favorable report from electric car maker Tesla (TSLA) sent that stock up modestly in extended hours trading.
– Harvey S. Katz, CFA
At the time of this article's writing, the author did not have positions in any of the companies mentioned.
