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Stock Market News for Oct 1, 2019

Zacks Equity Research

Wall Street closed in higher on Monday to the end the month and third quarter buoyed by positive development on trade war front. Positive Manufacturing PMI of China also increased investors’ sentiments. All three major stock indexes ended in positive territory for the day as well as for the month. However, in the third quarter, the Dow and the S&P 500 finished in the green while Nasdaq Composite suffered a marginal loss.

The Dow Jones Industrial Average (DJI) gained 0.4% to close at 26,916.83. The S&P 500 advanced 0.5% to close at 2,976.74. Meanwhile, the Nasdaq Composite Index closed at 7,999.34, increasing 0.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 1% to close at 16.24.  A total of 6.2 billion shares were traded on Monday, lower than the last 20-session average of 7.2 billion. Advancers outnumbered decliners on the NYSE by a 1.45-to-1 ratio. On Nasdaq, a 1.28-to-1 ratio favored advancing issues.

How Did The Benchmarks Perform?

The Dow closed in positive territory with 19 components of the 30-stock blue-chip index closing in the green while 10 ended in red and 1 remained unchanged. The S&P 500 also ended in the red. The Technology Select Sector SPDR (XLK) gained 1.1%. Notably, nine out of total 11 sectors of the benchmark index closed in the green while two finished in red. The Nasdaq Composite finished in the green due to strong performance of large-cap stocks. Apple Inc. AAPL with a Zacks Rank #3 (Hold) gained 2.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Positive Development on Trade War Front

On Sep 28, Blomberg reported that Treasury spokeswoman Monica Crowley said that the U.S. government is not planning to block Chinese companies to get listed in U.S. stock exchanges any time soon. On Sep 30, White House trade adviser Peter Navarro told CNBC that the news about delisting Chinese companies was highly inaccurate.

On Sep 27, Bloomberg reported that the U.S. government is considering limiting U.S. investment in Chinese companies. As a part of this broad-based measure, the Trump administration is likely to delist Chinese corporates from U.S. stock exchanges. Later CNBC also confirmed the news citing a source familiar with the development.Surprisingly, this development took place when high-level trade delegation of China will meet its U.S. counterpart in Washington during Oct 10-11.

Positive Economic Data for China

The Caixin Purchasing Managers Index for Chinese manufacturing sector came in at 51.4 in September compared with 50.4 in August. This was the quickest pace of growth of the manufacturing PMI in 19 months. The government’s official manufacturing PMI also edged up to 49.8 in September from 49.5 in August.

Monthly Roundup

Wall Street ended September in positive territory reversing some losses it suffered in august. All three major stock indexes ---- the Dow, the S&P 500 and Nasdaq Composite ---- gained 2%, 1.7% and 0.5%, respectively. The market was in upswing in the first half of September buoyed by the possibility of an interim trade deal and a second rate cut by the Fed. However, volatility erupted in the second half due to heightened trade tensions and likelihood of the initiation of an impeachment proceeding of President Donald Trump.

Quarterly Roundup

The third quarter of 2019 one was a mixed one unlike the first two quarter when Wall Strat bull run continued. In the third quarter, the Dow and the S&P 500 gained 1.2% each while the Nasdaq Composite suffered a marginal loss of 0.1%.

Wall Street started third quarter with the continuation of bull run since the beginning of July. However, the bull run ended in August owing to inversion of government yield curve which many economists believe as a sign of an impending recession. Trade jitters and global economic slowdown, especially in the Eurozone, significantly dented in investors’ confidence. However, the stock market recovered partially in September due to a second rate cut by the Fed and possibility of an interim trade deal.

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