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U.S. Stocks Turn In Mixed Performance After Yesterday's Sell-Off

wallstreet aug31 27oct20 lt

After moving sharply lower in the previous session, stocks turned in a mixed performance during trading on Tuesday. While the Dow and the S&P 500 moved to the downside on the day, the tech-heavy Nasdaq ended the day firmly in positive territory.

The major averages finished the day well on opposite sides of the unchanged line. The Nasdaq climbed 72.41 points or 0.6 percent to 11,431.35, while the Dow slid 222.19 points or 0.8 percent to 27,463.19 and the S&P 500 fell 10.29 points or 0.3 percent to 3,390.68.

The mixed performance on the day came amid concerns about the recent spike in coronavirus cases as well as continued uncertainty about the prospects for a new stimulus bill.

Traders were also reacting to some mixed economic data, with separate reports showing a jump in durable goods orders and an unexpected dip in consumer confidence.

The Commerce Department released a report before the start of trading showing new orders for U.S. manufactured durable goods jumped by much more than expected in the month of September.

The report said durable goods orders surged up by 1.9 percent in September after rising by rising by 0.4 percent in August. Economists had expected durable goods orders to increase by 0.5 percent.

The much stronger than expected growth in durable goods orders came as orders for transportation equipment soared by 4.1 percent in September after slumping by 0.9 percent in August.

Excluding the spike in orders for transportation equipment, durable goods orders climbed by 0.8 percent in September compared to a 1.0 percent jump in the previous month. Ex-transportation orders were expected to rise by 0.4 percent.

Meanwhile, the Conference Board released a report unexpectedly showing a slight drop in confidence in the month of October.

The Conference Board said its consumer confidence index edged down to 100.9 in October after jumping to a revised 101.3 in September.

The pullback surprised economists, who had expected the index to inch up to 102.0 from the 101.8 originally reported for the previous month.

"Consumers' assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

She added, "There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high."

Sector News

Airline stocks moved sharply lower over the course of the session, dragging the NYSE Arca Airline Index down by 3.3 percent.

Substantial weakness was also visible among banking stocks, as reflected by the 3 percent slump by the KBW Bank Index.

Oil, housing and pharmaceutical stocks also saw considerable weakness on the day, extending the downward move seen during trading on Monday.

On the other hand, gold stocks showed a strong move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 1.9 percent. The strength in the sector came amid an increase by the price of gold.

Software stocks also turned in a strong performance, resulting in a 1.2 percent advance by the Dow Jones U.S. Software Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index closed just below the unchanged line, while Hong Kong's Hang Seng Index fell by 0.5 percent.

The major European markets also moved to the downside on the day. While the French CAC 40 Index tumbled by 1.8 percent, the U.K.'s FTSE 100 Index slumped by 1.1 percent and the German DAX Index slid by 0.9 percent.

In the bond market, treasuries extended the upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.3 basis points to 0.778 percent.

Looking Ahead

Earnings news is likely to attract attention on Wednesday amid a quiet day on the U.S. economic front, although trading may also be impacted by reaction to any developments in Washington.

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