NEW YORK, Oct 28 ― Stocks on Wall Street closed little changed yesterday, with the Dow and S&P 500 slipping on disappointing earnings and little hope for a US coronavirus stimulus before Election Day, though the Nasdaq rose ahead of big technology company results.
Investor sentiment sagged after the White House said a deal on Covid-19 relief could come in “weeks,” meaning a deal is unlikely before the November 3 election.
But the tech-heavy Nasdaq rose as Microsoft Corp firmed in the run-up to its results after the closing bell, and the technology heavyweights kept the S&P 500 slightly in the black for much of the session.
Microsoft beat Wall Street estimates for quarterly revenue which rose 12 per cent to US$37.2 billion (RM154.9 billion), as the software giant benefited more from a global shift to work and learning from home.
Shares of drugmaker Eli Lilly and Co fell 6.9 per cent after quarterly profits took a hit from increased costs to develop a Covid-19 treatment. A trial of its antibody therapy failed to show a benefit in hospitalised patients.
“This pullback that we've seen is a little bit more of a risk-off move as an additional stimulus package now has been pushed aside,” Kevin Flanagan, head of fixed income strategy at WisdomTree Investments, said. “That led to some disappointment.”
On Monday, the three major US stock indexes posted their biggest declines in about four weeks on a record number of new coronavirus cases in the United States and some European countries, and as the elusive stimulus rattled investors.
Sectors sensitive to economic growth took a hit. The S&P 500 banks index fell 2.73 per cent and the S&P energy sector slid 1.38 per cent.
Meanwhile, Wall Street's fear gauge rose to its highest level since early September on election jitters.
Democratic challenger Joe Biden leads President Donald Trump in nationwide polls but the race is much tighter in battleground states which should determine the outcome.
The Dow Jones Industrial Average fell 222.19 points, or 0.8 per cent, to 27,463.19 and the S&P 500 lost 10.29 points, or 0.30 per cent, to 3,390.68. The Nasdaq Composite added 72.41 points, or 0.64 per cent, to 11,431.35.
The Nasdaq advanced in anticipation of results later this week from Apple Inc, Amazon.com, Google-parent Alphabet and Facebook Inc. The tech bellwethers together account for more than one-fifth of the S&P 500's total value.
The NYSE FANG+TM Index rose about 2.15 per cent.
Analysts expect the tech sector to post a 0.4 per cent increase in third-quarter earnings from a year earlier, while overall S&P 500 profit is forecast to fall 16.2 per cent, according to Refinitiv data.
Concerns over a rise in US coronavirus cases are weighing on the market but the technology sector seems to be the least exposed, said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
“A focus on big technology companies may move this market to rally despite the problems the virus is creating,” he said.
Semiconductor designer Advanced Micro Devices Inc fell 4.1 per cent after it agreed to buy Xilinx Inc in a US$35 billion all-stock deal. Xilinx shares soared 8.6 per cent, the largest percentage gainer on the S&P 500, while those of AMD-rival Intel fell 2.3 per cent.
Shares of Franklin Resources Inc fell 13.6 per cent, the largest decliner on the S&P 500, as the money manager reported quarterly adjusted earnings of 56 cents per share, below analysts' expectations. ― Reuters
