Before The Bell
It certainly has been an up-and-down week for Wall Street, as we head into the final session of this five-day span. On point, stocks started the week out on a high note, with the Dow Jones Industrial Average soaring by more than 400 points on Monday. That index then proceeded to tumble by almost as many points on Tuesday, before equity investors righted the ship on Wednesday with a late surge helping to lift the blue chips and the NASDAQ strongly. The market, boosted once more by technology, started out yesterday on a positive track, as well.
However, as far as the Dow was concerned, that initial uptick would prove momentary, while the NASDAQ would give a better account of itself, as has been the case all week. That is because despite slightly better news on the economy, as the Labor Department reported that initial jobless claims came in at 1.31 million in the latest week, which was less than the 1.39 million forecast, stocks started to pull back quickly, and after some 30 minutes, the Dow and the S&P 500 were in negative territory.
What turned things around was continued bad news on the coronavirus front, as a record numbers of cases were continuing to be reported across much of the country, with total infections and deaths from this disease now topping three million and 133,000, respectively. Also, at that time, news came out that the U.S. Supreme Court, by a 7-to-2 vote, ruled that New York prosecutors could enforce a subpoena for the President's financial and tax records. However, delays could force that release out until after the November election.
Also hurting the market was a dour earnings release from Dow component Walgreens Boots Alliance (WBA), with that drug chain reporting a sharp descent in quarterly earnings. That issue, weak for months, would fall further on this news, with the stock price getting uncomfortably close to a 52-week low before stabilizing some. All told, the Dow would lose more than 500 points at the session lows, before paring back those losses during the afternoon. The NASDAQ, bolstered by gains in Tesla (TSLA) and Amazon (AMZN), would again push higher.
That partial comeback would persist for a time as the session wound down, but would falter again as we neared the close. In all, the Dow would post a loss of 361 points, led lower by Walgreens and The Boeing Co. (BA). The S&P 500 would ease by 18 points, but the NASDAQ would run counter to this downtrend and would add 55 points. So, we would again seem to have a bifurcated stock market, with occasional weakness in the Dow Jones Industrial Average balanced by continuing strength in the tech-laden NASDAQ.
Finally, after yesterday's blue chip decline and some early gains in the futures last evening, the market seems poised to open the final session of the week modestly 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.
