Stocks fell Thursday for a third straight session, as investors considered fast-dimming prospects for fiscal stimulus before the U.S. election and a host of new virus-related restrictions in Europe.
A disappointing print on new jobless claims also contributed to the risk-off mood. New unemployment insurance claims unexpectedly rose last week, hitting the highest level since mid-August, in yet another sign of the labor market’s sputtering recovery.
Traders also continued to fixate on whether a stimulus deal of any size will transpire within the next three weeks, even as recent comments from lawmakers have overwhelmingly dampened hopes. President Donald Trump said Thursday he was willing to go above his current offer of $1.8 trillion – versus House Democrats’ $2.2 trillion proposal – while adding that he believed “Nancy Pelosi doesn’t want to give anything,” according to a Fox Business interview Thursday.
Treasury Secretary Steven Mnuchin, speaking at the Milken Institute Global Conference on Wednesday, said that “getting something done before the election and executing on that would be difficult, just given where we are in the level of details,” referring to talks with Democratic lawmakers. He and House Speaker Nancy Pelosi were set to speak again on Thursday to discuss stimulus measures, after having spoken Wednesday morning.
Overseas, countries and major cities across Europe imposed stricter orders to try and rein in a jump in new coronavirus cases. In London starting this weekend, individuals will be restricted from mixing with other households indoors, and in France, residents of Paris and eight other cities will be subject to nighttime curfews beginning Saturday.
A mixed set of corporate earnings this week has so far done little to buoy sentiment, with a number of big banks having reported results that underwhelmed against expectations. Wells Fargo (WFC) reported quarterly profit that was less than half that of the same period last year, and Bank of America (BAC) posted a drop in revenue and weaker sales and trading results than reported from major peers including JPMorgan Chase (JPM) and Citigroup (C).
Goldman Sachs (GS), however, broke away from the pack and delivered profit that doubled over last year, with results driven by strong fixed-income trading and asset management revenue.
Still, most big bank executives so far this week have suggested the worst of the pandemic’s impact on results may be behind them after an especially tough second quarter, though they acknowledged the distance still left to overcome in the economic recovery.
4:01 p.m. ET: Stocks post third straight day of losses
The three major indices pared losses over the course of Thursday’s session, but still logged a third straight day of declines. Here’s where stocks ended Thursday’s session:
S&P 500 (^GSPC): -5.34 points (-0.15%) to 3,483.33
Dow (^DJI): -18.68 points (-0.07%) to 28,495.32
Nasdaq (^IXIC): -54.86 points (-0.47%) to 11,713.87
1:07 p.m. ET: Stocks hold lower as session rolls on
The three major indices held onto losses intraday on Thursday, led by a decline in the tech stocks that had led to the upside earlier this week. The Nasdaq underperformed against the other two major indices, dropping more than 1%, or 130 points.
The Dow’s more than 100-point loss intraday Thursday came as shares of Salesforce.com and Merck & Co. lagged and each dropped more than 1.7%. In the S&P 500, the communication services, information technology and health-care sectors underperformed.
9:34 a.m. ET: Stocks open sharply lower after jobless claims disappointed
Here were the main moves in markets as of 9:34 a.m. ET:
S&P 500 (^GSPC): -38.58 points (-1.11%) to 3,450.09
Dow (^DJI): -266.98 points (-0.94%) to 28,247.02
Nasdaq (^IXIC): -149.57 (-1.26%) to 11,619.69
Crude (CL=F): -$1.48 (-3.61%) to $39.56 a barrel
Gold (GC=F): -$10.30 (-0.54%) to $1,897.00 per ounce
10-year Treasury (^TNX): -1.3 bps to yield 0.709%
8:50 a.m. ET: Import prices increase for a fifth straight month
Import prices increased in September for a fifth straight month, albeit at a decelerating pace, as non-petroleum product prices rose, the Labor Department said.
Import prices increased 0.3% last month following an upwardly revised 1.0% gain in August. The increase matched consensus expectations, based on Bloomberg-compiled data. Excluding petroleum, import prices rose 0.7%, or faster than the 0.5% increase expected.
8:30 a.m. ET: Jobless claims jump in latest week as layoffs start to bite
Nearly 900,000 workers filed for new unemployment benefits last week, as a wave of major corporate layoffs start to show up in the data — just as the U.S. economy confronts rising COVID-19 infections. The jobless claims were the highest in nearly two months, and as UBS noted, comes at a time when the economy is transitioning “from hiring by companies with a future to firing by companies in structural decline.”
7:59 a.m. ET: Walgreens shares rise after retail pharmacy sales top estimates
Walgreens Boots Alliance (WBA) posted better than expected fiscal fourth quarter results as its retail pharmacy business grew amid the pandemic.
Retail pharmacy comparable sales increased 3.2% over last year, topping estimates for a 2.91% rise. Adjusted earnings of $1.02 per share were also ahead of estimates for 96 cents, but represented a decline of 28% over last year.
Walgreens’ prescriptions filled increased 1.6%, and its front-of-store sales rose 4.7% on the back of double-digit growth in its health and wellness category and 8% growth in its personal care category and personal protective equipment. Sales in its beauty category, however, fell slightly.
Walgreens said it expects fiscal 2021 adjusted earnings will grow in the low-single-digits over last year.
“While the company anticipates a gradual reduction in COVID-19 impacts, the first half results will continue to be negatively impacted when compared with the pre-COVID-19 first half of fiscal 2020,” Walgreens said in a statement. “However, for the second half, the company anticipates strong adjusted EPS growth, as these effects subside and recovery plans take hold in key markets.”
7:51 a.m. ET: Morgan Stanley’s third-quarter results top estimates as stocks and bond trading revenues boosts results
Morgan Stanley (MS) joined peers including JPMorgan Chase in reporting better than expected markets revenue, with higher volumes during a stock market run-up through the summer driving heightened activity across its trading desks.
“We delivered strong quarterly earnings as markets remained active through the summer months, and our balanced business model continued to deliver consistent, high returns,” CEO James Gorman said in a statement. “The completion of the E*TRADE acquisition, the subsequent ratings upgrade from Moody’s, and the recently announced acquisition of Eaton Vance significantly strengthen our Firm and position us well for future growth.”
Equities sales and trading revenue rose 14% over last year to $2.26 billion, and fixed-income trading increased 35% $1.92 billion. Overall, net revenue climbed to $11.7 billion, up from $10 billion in the same quarter last year. Profit also topped estimates and grew over last year despite the low-rate environment, with net income applicable to Morgan Stanley at $2.7 billion, from $2.2 billion last year, and net interest income of $1.49 billion ahead of estimates for $1.1 billion
7:18 a.m. ET Thursday: Stock futures drop, Dow futures shed 250+ points
Here were the main moves in markets, as of 7:18 a.m. ET:
S&P 500 futures (ES=F): 3,446.75, down 34.25 points or 0.98%
Dow futures (YM=F): 28,150.00, down 264 points or 0.93%
Nasdaq futures (NQ=F): 11,809.75, down 164.5 points or 1.37%
Crude (CL=F): -$0.99 (-2.41%) to $40.05 a barrel
Gold (GC=F): -$8.70 (-0.46%) to $1,898.60 per ounce
10-year Treasury (^TNX): -2.3 bps to yield 0.699%
6:03 p.m. ET Wednesday: Stock futures open mixed
Here were the main moves in equity markets, as of 6:03 p.m. ET:
S&P 500 futures (ES=F): 3,482.25, up 1.25 points or 0.04%
Dow futures (YM=F): 28,427.00, up 13 points or 0.05%
Nasdaq futures (NQ=F): 11,963.5, down 10.75 points or 0.09%