U.S. stock markets closed lower on Thursday as the fresh fiscal stimulus impasse continued. Moreover, market participants remained concerned about repeated spike in coronavirus infections both in the United States and Eurozone countries. Weak economic data also dented investors' confidence. All the three major stock indexes ended in the red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.1% to close at 28,494.20, maintaining a 3-day losing streak. Notably, 14 components of the 30-stock index ended in the red while 16 finished in green. The index reentered into negative territory year to date.
Moreover, the tech-laden Nasdaq Composite finished at 11,713.80, dropping 0.5% due to the weak performance by large-cap technology stocks. The tech-heavy index has declined for three successive days. Major loser of the Nasdaq Composite was Vertex Pharmaceuticals Inc.VRTX that plunged 20.7%. Vertex Pharmaceuticals carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, the S&P 500 slumped 0.2% to end at 3,483.34, continuing the 3-day losing run. The Energy Select Sector SPDR (XLE) gained 1.2%. Notably, seven out of eleven sectors of the benchmark index closed in positive zone and four in the red.
The fear-gauge CBOE Volatility Index (VIX) was up 2.2% to 26.97. A total of 8.1 billion shares were traded on Thursday, lower than the last 20-session average of 9.6 billion. Advancers outnumbered decliners on the NYSE by a 1.09-to-1 ratio. On Nasdaq, a 1.19-to-1 ratio favored advancing issues.
Stimulus Impasse Continues
Despite intense negotiations between the White House and the Democrats, the U.S. Congress is unable to reach a deal regarding the size and the scope of a fresh round of fiscal stimulus. The Democrats have settled for $2.2 trillion stimulus while the White House approved only $1.8 trillion. Yesterday, President Donald Trump said that he is ready to raise the size of the aid-package. However, Senate Republicans have vehemently opposed the package.
Resurgence of Coronavirus
Several states and regions in the United States and major Eurozone countries have recently witnessed another spike in COVID-19 infections as these economies are trying to return to normalcy.
As per Johns Hopkins University Data, the seven-day average of daily new U.S. cases of the coronavirus continued to rise and topped 52,345 as of Oct 14. Average daily new infections are 17% higher than a week ago and have been growing for the last 10 days.
In Europe, the government of France has declared a public health state of emergency and the U.K. government is mulling a second national lockdown. More lockdowns will significantly affect global trade, travel and tourism.
The Department of Labor reported that weekly jobless claims increased by 53,000 to 898,000 for the week ended Oct 10. The consensus estimate was 824,000 and previous week's data revised upward to 845,000 from 840,000 reported earlier. This was the highest weekly jobless claims since Aug 22. Moreover, the unadjusted initial jobless claims came in at 885,885 compared with 809,215 in the previous week.
Continuing claims (people who are already receiving benefits) declined to 10.018 million for the week ended Sep 26 from 11.183 million in the prior week. Unadjusted continuing claims dropped to 9,632 million from 10.82 million in the prior week. The four-week moving average for continuing claims dropped by 682,250 to 11.48 million.
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