Wall Street showed continued weakness as concerns over the run-up in coronavirus cases, renewed restrictions in Europe and fears of more punitive lockdowns on the way in the U.S. weighed on sentiment — and more in Wednesday’s stock market update.
The stimulus negotiations are likely done but President Donald Trump promised the “best stimulus package you’ve ever seen” after the election while campaigning Wednesday. Meanwhile, volatility spiked to another monthly high continues to indicate nervousness over the near-term.
The Nasdaq gave back 3.7% with the intraday low hitting 10,999.
The S&P 500 sank 3.5% after testing a second-half low of 3,268.
The Dow dropped 3.4% following the late-day pullback to 26,497.
The Russell 2000 tanked 3% with the session low reaching 1,542.
Energy and Communication Services were the weakest sectors with losses of 4.2% and 3.9%, respectively. There was no sector strength.
Shares of Tupperware Brands Corp. (NYSE: TUP) zoomed 35% after reporting quarterly results of $1.20 a share on revenue of $477 million. Wall Street was looking for a profit of 37 cents a share on sales of $362 million. The company said increased consumer demand for its innovative and environmentally friendly products drove results as more consumers cook at home and are concerned with food safety and storage.
The CEOs of Facebook Inc. (Nasdaq: FB), Twitter Inc. (NYSE, TWTR), and Alphabet Inc. (Nasdaq: GOOGL) testified before a congressional committee Wednesday, specifically about digital privacy and how the digital ad industry has hurt journalism.
Republican officials complained about a perceived anti-conservative bias in social media while Democrats expressed concerns about big tech’s power, with the companies facing increased scrutiny over antitrust practices and lawsuits. Nothing was accomplished with all three CEO’s saying they will return at a latter date for more talks.
All three stocks settled lower with all of the aforementioned companies reporting numbers after Thursday’s closing bell. Their results will certainly impact trading on Friday’s open.
European markets were punished following news Germany will impose the nation’s toughest restrictions since the national lockdown back in the spring. A deal to impose a one-month partial shutdown was agreed upon after talks with leaders of the country’s 16 states.
Germany’s DAX 30 plummeted 4.2% and France’s CAC 40 fell 3.4%. The Belgium20 tumbled 3.3% and the Stoxx 600 lost 3%. UK’s FTSE 100 was lower by 2.6%.
Asian markets were mixed.
South Korea’s Kospi rose 0.6% and China’s Shanghai added 0.5%. Australia’s S&P/ASX 200 edged up 0.1%. Hong Kong’s Hang Seng and Japan’s Nikkei were down 0.3%.
MBA mortgage applications rose 1.7% after two weeks of decline, with the refi component rising 2.5%. The purchase index rebounded 0.2%, breaking a string of four straight weekly declines. The 30-year fixed mortgage rate dipped back to its all-time low of 3% from 3.02% last week while the five-year ARM rose to 3.05% from 2.86%.
Advance indicators showed the trade deficit narrowed to -$79.4 billion in September from -$83.1 billion in August. Goods imports slipped -0.2% to $201.4 billion following the 3.3% rise to $201.9 billion previously. Goods exports climbed 2.7% to $122 billion after increasing 3% to $118.8 billion previously. Wholesale inventories dipped -0.1% to $634.8 billion following the 0.3% gain to $635.2 billion in August. Retail inventories climbed 1.6% to $67 billion in September after rising 0.5% to $597.5 billion previously.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was up for the fourth straight session after tapping a high of $161.46. Prior and lower resistance at $161-$161.50 was cleared but held. A close above the latter would indicate a retest towards $162-$162.50 and the 50-day moving average.
Support is at $160.50-$160 and the 200-day moving average.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its winning streak to three straight sessions after surging to an intraday high of 40.77. Prior and lower resistance from early June at 40.50-41 was cleared but held. A move above the latter would signal additional upside towards 42-44 with the June peak at 44.44.
Fresh support is at 37.50-37 followed by 35-34.50. A close back below 34 would signal a possible near-term top.
The S&P 400 Mid Cap Index (NYSE: MID) fell for the third straight session after closing on the session low of 1,895. Fresh and upper support at 1,900-1,875 was breached and failed to hold. A close below the latter would likely lead to a further backtest towards 1,850-1,825.
Lowered resistance is at 1,925-1,950 and the 50-day moving average.
RSI (relative strength index) remains in a downtrend with upper support at 45-40 failing to hold. A close below the latter would suggest weakness towards 35-30 and levels from last month. Resistance is at 50.
The Dow Jones Transportation Average ($TRAN) was down for the third straight session with the intraday low tagging 10,937. Prior and upper support from mid-September at 11,000-10,900 was breached and failed to hold. A move below the latter would signal additional weakness towards 10,800-10,700 and levels from early August.
Lowered resistance is at 11,100-11,200 followed by 11,300-11,400 and the 50-day moving average.
RSI (relative strength index) is in an downtrend with upper support at 35-30 holding. A close below the latter would indicate additional weakness towards 25-20 and levels from late February/ early March. Resistance is at 40.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.