US Stocks Swing From Losses to Gains 09/24 09:57
U.S. stocks are swinging between losses and gains in Thursday morning
trading, as volatility continues to be the dominant force in Wall Street's
New York (AP) -- U.S. stocks are swinging between losses and gains in
Thursday morning trading, as volatility continues to be the dominant force in
Wall Street's tumultuous September.
The S&P 500 was 0.1% higher, as of 10:25 a.m. Eastern time, after earlier
yo-yoing between a loss of 0.8% and a gain of 0.6%. The Dow Jones Industrial
Average was up 2 points, or less than 0.1%, at 26,765, and the Nasdaq composite
was 0.2% higher. Both the Dow and Nasdaq also recovered from earlier losses,
with the Nasdaq at one point down 1.1%.
The market's momentum has shifted with lightning speed recently, often
changing direction by the hour. On Wednesday, the S&P 500 rose to a modest gain
when trading began, only to end the day with a 2.4% slump. It's down more than
9% from its record set on Sept. 2.
Thursday's headline report showed that 870,000 workers filed for
unemployment claims last week. That's slightly more than the prior week and a
little higher than economists expected. The numbers come as investors are
increasingly resigned to Congress not delivering more support for the economy,
as many had been expecting, after extra unemployment benefits and other
stimulus expired recently.
"Inaction speaks louder than words," Morgan Stanley strategists wrote in a
report. They no longer expect Congress to approve a meaningful stimulus package
before the end of the year as part of its base case.
But stocks recovered from their early losses after a report showed that
sales of new homes accelerated last month, contrary to economists' expectations
for a slight slowdown. A turnaround for Big Tech stocks also helped to lift the
They're the latest erratic moves for Wall Street, which has slumped sharply
this month. Several reasons are behind the abrupt tumble, highlighted by
worries that stocks simply grew too expensive following their record-setting
run through the spring and summer.
Among other concerns weighing on markets are the upcoming U.S. elections,
particularly after President Donald Trump's refusal Wednesday to commit to a
peaceful transition of power if he lost, and rising tensions between the United
States and China.
Layered on top of it all is the still-raging coronavirus pandemic and the
threat that worsening counts around the world could lead to more business
It's a stark shift from late March into early this month, when the S&P 500
soared 60% and more than recovered all its earlier losses on worries about the
pandemic-caused recession. Still in investors' favor is unprecedented support
from the Federal Reserve, which is holding short-term interest rates at nearly
zero and buying all kinds of bonds to support markets.
But Fed Chair Jerome Powell has said several times in testimony on Capitol
Hill this week that the central bank can't prop up the economy by itself and
that the recovery likely needs more help from Congress. He's due to testify
again on Thursday.
Paralyzing partisanship has prevented a Congressional renewal of aid, and
the recent vacancy on the Supreme Court caused by the death of Justice Ruth
Bader Ginsburg has deepened the divide.
Much of the market's weakness this month has centered on Big Tech, where
critics said prices exploded too high even after accounting for the companies'
Amazon, Apple and others have seen their revenue continue to rise through
the pandemic, as work-from-home and other trends that benefit them take deeper
hold. But Amazon shares were up more than 90% for the year just a few weeks
ago, for example, and they tumbled in recent weeks.
On Thursday, Amazon bounced back from an early morning loss to perk 1.6%
higher. Other Big Tech stocks also shook off losses to rise. Apple was up 1.4%,
Microsoft was up 1.4% and Google's parent company was up 1.4%.
Moves for such stocks have an outsized effect on broad indexes like the S&P
500 because they're the largest companies in the market by value.
The yield on the 10-year Treasury dipped to 0.66% from 0.67% late Wednesday.
In Europe, Germany's DAX was close to flat, and France's CAC 40 fell 0.3%.
The FTSE 100 in London dropped 1%.
In Asia, Japan's Nikkei 225 fell 1.1%, South Korea's Kospi tumbled 2.6% and
Hong Kong's Hang Seng dropped 1.8%. Stocks in Shanghai lost 1.7%.