Market Recap: Tuesday, September 29

The markets closed in the red as investors were forced to consider the Democrats’ new stimulus proposal in Congress and awaited the impact of the first presidential debate. The Final Round panel discusses the latest.

Video Transcript

SEANA SMITH: Welcome back to "The Final Round" here on Yahoo Finance. Taking a look at where we are with just around 30 seconds left in the trading day. We have stocks taking a bit of a breather after yesterday's strong rally and, of course, the rally into the close on Friday. Taking a look at all three of the major averages, we are off the lows of the day, but still in the red.

The Dow off just over 100 points, S&P off just around 4/10 of a %, and the NASDAQ is the best underperformer, I guess you can say, in the market today with the NASDAQ off just around a quarter of a %, but still holding well above 11,000, but falling through 11,100. In terms of the sector action, energy the weakest performer today.

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That wraps up the trading day today. Again, a downward day across the board with the Dow and the S&P off nearly a half of a %, the NASDAQ off just around 3/10 of a %. When we take a look at some of the headlines here, raising some risk in the market has investors' attention. The coronavirus headlines-- cases in the US and around the world continuing to climb. We had stocks hitting the lows of the day after New York City reported its new numbers-- its positive rate for tests back above 3%. That's the highest number that we have seen since June. The Dow off just about 245 points at the lows of the day.

And then, of course, we are closely watching the talks on stimulus. We have the Dems putting forward a $2.2 trillion proposal. But, of course, the odds of a deal are low at this point. We'll talk a little bit more about that with Jess Smith in just a few minutes. But in terms of the market action as a result of that, airline stocks under a bit of pressure today. We talk about that October 1 deadline-- that's when airliners could lay off tens of thousands of employees if they don't get additional aid from the government. Delta, United, JetBlue amongst the big airliners here under pressure today.

In terms of the sector action, I mentioned the weakness that we're seeing in energy. This, of course, comes after energy led yesterday's rally financials, are also one of the underperformers in today's market. We're seeing some of the big banks like Wells Fargo, Citi under pressure today, Morgan Stanley. And then, of course, some of the regionals as well. In terms of the outperformers in today's market, utilities and communication services.

Two pieces of data points that I want to bring up-- Case-Shiller, that home price report climbing on a year over year basis in the month of July, up 4.8% percent from a year ago. Consumer confidence jumping much more than expected. Biggest gain in 17 years, the highest level that we've seen since the start of the pandemic. But Myles pointed this out last hour-- it's important to put this in perspective for everyone. We are still well below those pre pandemic levels.

And with that said, let's bring in my co-host for the next 60 minutes, Myles Udland. And Myles, when you take a look at today's action, we're seeing a bit of a breather here across the board. Some worrisome headlines here in the market. But again, just a continuation, I think, of some of those risks that we've been talking about over the last several weeks.

MYLES UDLAND: Yeah, I want to pick up on what you were talking about with consumer confidence because I think it's a very important factor in thinking about the economy right now. And this will dovetail into those stimulus talks because I think what consumer confidence, in combination with consumer spending data-- you know, JP Morgan's card tracker, and to some extent, we're seeing in housing, though I think that's sort of charting its own path.

What we have seen is an economy that is really quite durable here, and I think to the surprise of many commentators, many economists. Certainly to the surprise of myself. I mean, I think through July and certainly into August, I was absolutely among those pounding the table saying we must have an extension of the CARES Act, otherwise there will be a significant downturn in consumer spending, and therefore a significant slowdown in economic growth.

And while we have seen the pace of growth moderate, I think that the way the consumer has held up and the way that that cushion that some folks were able to develop as a result of those enhanced unemployment benefits-- the one-time stimulus checks, the suspension of rent payments in a lot of parts of the country-- this has all helped the consumer weather this period without extra stimulus better than most had expected.

And I think it maybe changes the way some folks may think about the recovery into 2021, where there had been this assumption that all these growth numbers would be underwritten by a couple more trillion dollars of stimulus, which may well come. We'll see what happens with the election. But perhaps there's now this notion that the economy can maybe hold up better on its own. It certainly has so far. That's not a reason to grow complacent.

But I think it is a new wrinkle, or at least a new way of conceiving about what the future of this recovery might look like. And I think the more we see data like this consumer confidence number surprise to the upside, the more we have to keep in mind the possibility that perhaps that one stimulus, you know, bill-- that was it. But maybe that stimulus bill was a bit more forceful than perhaps we initially would have thought.