Stocks reversed earlier gains and ended mixed on Friday, as investors continued to eye commentary from officials around stimulus talks and considered the final presidential debate.
The S&P 500 and Nasdaq ended the day slightly higher, although the blue-chip index still logged its first weekly loss in a month after declining early in the week.
The Dow ended in the red as a couple of components declined after posting disappointing quarterly results. Shares of Intel (INTC) sold off more than 10% after the company unexpectedly posted a quarterly decline in data center chip sales, driven by a near-halving of revenue from enterprise and government clients during to the pandemic. Shares of peer Dow component American Express (AXP) also declined, after the company reported third-quarter profit that missed consensus expectations.
Meanwhile, Gilead’s stock (GILD) rose but then pared gains after the company’s COVID-19 antiviral treatment remdesivir became the first to receive formal approval from the U.S. Food and Drug Administration. The drug was used as part of President Donald Trump’s treatment following his COVID-19 diagnosis this month.
During the regular session Thursday, the three major indices got a boost after House Speaker Nancy Pelosi told reporters in Washington that negotiators were “just about there” when it came to hashing out a deal for more virus-relief aid, stoking optimism that negotiators would manage to settle their differences and reach an agreement this week. However, Friday morning, White House economic adviser Larry Kudlow said on Bloomberg TV that “the ball’s not moving much right now” in discussions, and that he doesn’t “want to make any predictions” on timing of an agreement.
Investors have been on edge over whether a deal would get done – and legislation actually passed – ahead of the November election. Just earlier this week, Pelosi had set a Tuesday deadline to come to an agreement with the White House, but later moved that goalpost out further and said she was eyeing a deal by the end of the week. And Senate Republicans have so far opposed passing a multi-trillion-dollar relief package, raising the specter that any major deal reached between House Democrats and the White House would ultimately get struck down.
Data earlier in the day underscored the extent of the economic damage with the coronavirus pandemic and lack of stimulus both still at play. While headline new jobless claims fell more than expected last week, another more than half-million Americans exhausted regular state benefits and rolled onto a longer-term unemployment compensation program, suggesting a large number of individuals put out of work earlier on during the pandemic were still unemployed.
4:03 p.m. ET: Stocks end Friday mostly higher, but post a weekly loss
Here’s where the major equity indices ended the session on Friday:
S&P 500 (^GSPC): +11.92 points (+0.35%) to 3,465.41
Dow (^DJI): -28.03 points (-0.1%) to 28,335.63
Nasdaq (^IXIC): +42.28 points (+0.37%) to 11,548.28
12:36 p.m. ET: Sell off picks up speed with Dow shedding half a percent
Wall Street has now taken another leg lower after Treasury Secretary Steve Mnuchin suggested “significant differences” separate the White House and Congress on a stimulus bill, further dimming prospects for a pre-election agreement. Mnuchin added that House Speaker Nancy Pelosi had “dug in” on the Democrats’ position.
12:12 p.m. ET: Indices turn lower as stimulus prospects dim; tech leads to the downside
The three major indices erased earlier gains to trade lower Friday afternoon, led by a drop in big tech companies.
Here’s where markets were trading shortly after noon:
S&P 500 (^GSPC): -3.06 points (-0.09%) to 3,450.33
Dow (^DJI): -106.54 points (-0.38%) to 28,257.12
Nasdaq (^IXIC): -39.95 points (-0.35%) to 11,466.14
Crude (CL=F): -$0.043 (1.06%) to $40.21 a barrel
Gold (GC=F): -$5.70 (-0.3%) to $1,898.90 per ounce
10-year Treasury (^TNX): -0.3 bps to yield 0.845%
9:50 a.m. ET: U.S. service sector activity expands by the most since February 2019
Activity in the U.S. service sector picked up more than expected in October, according to IHS Markit’s preliminary October purchasing managers’ index (PMI).
The index climbed to 56.0 for the month from 54.6 in September, with consensus economists having expected the index to remain at the same level in October. This marked the highest level since February 2019.
U.S. manufacturing sector activity also rose by the most since early 2019, with its PMI ticking up to 53.3 from 53.2 in September. Readings above the neutral level of 50.0 indicate expansion in a sector.
Here’s what Chris Williamson, chief business economist for IHS Markit, had to say in a statement of improvements:
“The US economy looks to have started the fourth quarter on a strong footing, with business activity growing at a rate not seen since early 2019. The service sector led the expansion as increasing numbers of companies adapted to life with COVID19, while manufacturing continued to report solid growth amid rising demand from households and businesses.
A slowdown in hiring and weaker new order inflows were in part attributable to hesitancy in decision making ahead of the presidential election. More encouragingly, business optimism surged higher, indicating that firms have become increasingly positive about prospects for the coming year amid hopes of renewed stimulus, COVID-19 containment measures gradually easing and greater certainty for businesses and households after the presidential elections.”
9:36 a.m. ET: Stocks open higher, even as Intel, American Express slide weighs on Dow gains
Here were the main moves in markets, as of 9:36 a.m. ET:
S&P 500 (^GSPC): +8.7 points (+0.25%) to 3,462.19
Dow (^DJI): +55.61 points (+0.2%) to 28,419.27
Nasdaq (^IXIC): -10.69 points (-0.1%) to 11,494.02
Crude (CL=F): +$0.04 (+0.1%) to $40.68 a barrel
Gold (GC=F): +$7.30 (+0.38%) to $1,911.90 per ounce
10-year Treasury (^TNX): +1.2 bps to yield 0.86%
7:22 a.m. ET: American Express posts 3Q earnings miss as business ‘continues to be significantly affected by the pandemic’
American Express on Friday posted third-quarter earnings of $1.30 per share, missing consensus estimates by 4 cents as the ongoing pandemic weighed especially hard on corporate card spending.
Revenue of $8.75 billion was down 20% over last year, but still better than the $8.63 billion expected. The company noted that it has seen a “steady recovery” in overall spending volumes.
“While our business continues to be significantly affected by the impacts of the pandemic, our third quarter results have increased our confidence that our strategy for managing through the current environment is the right one,” CEO Stephen Squeri said in a statement.
“In fact, we had positive year-over-year growth in non-T&E [travel and expense] spending, which has long accounted for our overall volumes,” he added. “While credit remains strong, with delinquencies and net write-offs at the lowest levels we have seen in a few years, we remain cautious about the direction of the pandemic and its impact on the economy, which is reflected in our reserve levels.”
Provisions for credit losses company-wide were down 24% for last year to $665 million as American Express released some reserves. The company did build reserves in its global commercial services business, where provisions were up 13% over last year to $250 million.
7:22 a.m. ET Friday: Stocks pace toward a higher open as stimulus talks remain in focus
Here were the main moves in markets, as of 7:22 a.m. ET:
S&P 500 futures (ES=F): 3,458.00, up 8.75 points or 0.25%
Dow futures (YM=F): 28,350.00, up 82 points or 0.29%
Nasdaq futures (NQ=F): 11,670.50, up 20.75 points or 0.18%
Crude (CL=F): +$0.12 (+0.30%) to $40.76 a barrel
Gold (GC=F): +$8.30 (+0.44%) to $1,912.90 per ounce
10-year Treasury (^TNX): +1.2 bps to yield 0.86%
6:07 p.m. ET Thursday: Stock futures point higher
Here were the main moves in markets, as of 6:07 p.m. ET:
S&P 500 futures (ES=F): 3,454.5, up 5.25 points or 0.15%
Dow futures (YM=F): 28,317.00, up 49 points or 0.17%
Nasdaq futures (NQ=F): 11,674.50, up 24.75 points or 0.21%