S&P 500 opens deep in red for third straight day

Marco Green
October 16, 2020

US Treasury Secretary Mnuchin says it will be hard to reach a deal on COVID aid.

Hopes of another round of fiscal aid to support the USA economy's recovery helped fuel Wall Street's recent rally, bringing the S&P 500 and Nasdaq earlier this week to within 2% of their record closing highs from Sept 2.

Correspondingly, the S&P 500 might rebound back higher with future stock market volatility expectations drifting lower.

"More of what moves the market will be the crystallizing of who is going to win the presidency, and how close the Senate races are", said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta. However, Biden is also widely seen on Wall Street as likely to raise taxes.

The bellwether Dow Jones Industrial Average dipped barely 0.1 per cent to end the trading session at 28,494.2, while the broad-based S&P 500 lost 0.2 per cent to close at 3,483.34.

The tech-rich Nasdaq Composite Index fell 0.5 per cent to 11,713.87.

Morgan Stanley fell 0.8% in premarket trading ahead of its results which would wrap up earnings from major Wall Street lenders.

Alcoa shares dropped 5.4 per cent after the company warned of a likely decline in earnings in the fourth quarter, while drug store chain Walgreens Boots Alliance gained 4.8 per cent on better-than-expected earnings. Angst stemming from fiscal stimulus uncertainty could weigh negatively on stocks in the short-term, but with the prospect of a democratic sweep and even larger stimulus package early next year, the S&P 500 could stay broadly afloat.

Declining issues outnumbered advancing ones on the NYSE by a 1.51-to-1 ratio; on Nasdaq, a 1.95-to-1 ratio favored decliners.

The S&P 500 posted 23 new 52-week highs and no new lows; the Nasdaq Composite recorded 109 new highs and 14 new lows.

Volume on U.S. exchanges was 8.2 billion shares, compared with the 9.6 billion average over the last 20 trading days.

Other reports by Click Lancashire

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