Stocks closed mostly lower for the third straight session with small caps outperforming the major indexes — and more in Thursday’s stock market update.
A weak jobs report and an increasingly bleak outlook for a near-term stimulus package pushed stocks lower on the open before a midday turnaround.
Additionally, earnings were mixed. United Airlines Holding Inc. (Nasdaq: UAL) reported a $1.8 billion quarterly loss while Morgan Stanley (NYSE: MS) reported better-than-expected numbers.
The Russell 2000 rallied 1.1% with the intraday high reaching 1,641.
The Nasdaq fell 0.5% following the morning fade to 11,559.
The S&P 500 slipped 0.2% after testing an intraday low of 3,440.
The Dow dipped 0.1% while testing an opening low of 28,181.
Energy and Financials paced sector strength after rising 1.2% and 0.8%, respectively. Communications Services and Healthcare declined 0.8% and 0.7% to lead sector laggards.
Fastly Inc. (NYSE: FSLY) shares tumbled 27% after the company cuts its third-quarter revenue to $70-$71 million from $73.5-$75.5 million. The company also withdrew its fiscal 2020 outlook as its largest customer, TikTok, did not grow as fast as expected and several other customers had lower-than-expected usage.
President Donald Trump and Democratic opponent Joe Biden will participate in competing town halls Thursday night that could have a slight impact on Friday’s open. The candidates were scheduled to square off in a debate but switched formats after the Commission on Presidential Debates last week announced the debate would be held virtually, and Trump canceled.
The competing events will act as one of the final moments for each candidate to energize their base and swing undecided voters to their side. Trump will look to recover after being largely criticized for his performance in the first presidential debate last month, while Biden could face increased questioning on his son’s business dealings.
European markets closed lower across the board on the fading possibility of U.S. stimulus and increased restrictions on mobility in the wake of a second wave of coronavirus cases.
Germany’s DAX 30 plummeted 2.5% and the Belgium20 sank 2.2%. France’s CAC 40 and the Stoxx 600 tanked 2.1% while UK’s FTSE 100 tumbled 1.7%.
Asian markets settled mostly lower despite China’s central bank adding medium-term funding to the financial system.
Hong Kong’s Hang Seng fell 2.1% and South Korea’s Kospi gave back 0.8%. Japan’s Nikkei was down 0.5% and China’s Shanghai was off 0.3%. Australia’s S&P/ASX 200 gained 0.5%.
Initial Jobless Claims rose 53,000 to 898,000 following a -4,000 slide to 845,000 in the previous week. Expectations were for a print of 833,000. The four-week moving average rose to 866,250 versus 858,250. Continuing claims plunged -1,165k,000 to 10,018,000 after falling -796,000 to 11,183,000 in the prior week.
Import prices rose 0.3% in September and export prices increased 0.6%. The 12-month gauge posted a -1.1% year-over-year pace of contraction versus -1.4% previously, while export prices were -1.8% versus -2.7%. For imports, petroleum prices dropped -4.2% after rising 3.5% previously. Excluding petroleum, import prices were up 0.7% from the prior 0.8% gain. Industrial supplies prices rose 0.9% versus 3.7% in August. For exports, agricultural prices bounced 2.7% from -2.3%. Excluding ag, export prices edged up 0.3% from 0.8%.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) fell for the first time in four sessions despite tagging a morning high of $163.19. Prior and lower resistance from the start of the month at $163-$163.50 was cleared but held. A close above the latter and the 50-day moving average would be a more bullish signal with additional upside towards $164.50-$165.
Near-term and upper support at $162-$161.50 failed to hold on the fade to $161.64 afterwards. A move below the latter would signal a further backtest towards $160.50-$160.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its winning streak to four straight sessions with the intraday peak hitting 29.06. Prior and lower resistance at 29-29.50 was breached but held. A move above the latter would indicate a retest towards 30-30.50 and the 200-day moving average.
Rising support is at 26.50-26 followed by 25.75-25.25 and the 50-day moving average.
The Wilshire 5000 Composite Index (NYSE: WLSH) fell for the third straight session with the morning low reaching 35,505. Current and upper support at 35,750-35,500 was breached but held. A close below the latter would indicate additional weakness towards 35,250-35,000.
Lowered resistance is at 36,000-36,250.
RSI has flatlined with key support at 60 holding. A close below this level would signal additional weakness towards 55-50 and levels from late September. Resistance is at 65-70.
The Utilities Select SPDR Fund (NYSE: XLU) extended its losing streak to three-straight sessions after testing an intraday low of $62.60. Near-term and upper support at $63-$62.50 was tripped but held. A close below the latter would signal a further back test towards $62-$61.50.
Resistance is at $63.50-$64 with the monthly peak at $64.31.
Check back for the most important news and numbers after the closing bell each day in the WealthPress stock market update.