By The Associated Press #local-all (CNT)
Stocks are drifting in early trading on Wall Street Tuesday, as the market’s momentum slows following the S&P 500′s best day in more than three weeks and another rocky stretch of trading.
The benchmark index was 0.1% lower after flipping between very small gains and losses in the first few minutes of trading. Other stock markets around the world made mostly modest gains, while longer-term Treasury yields were hanging close to their highest levels in months.
The Dow Jones Industrial Average was up 60 points, or 0.2%, at 28,209, and the Nasdaq composite was 0.4% lower.
Most stocks across the market were rising, and roughly three in five within the S&P 500 were higher. Companies that would benefit most from a strengthening economy led the way, including energy companies, raw-material producers and banks.
But many of the big stocks that carried Wall Street back to record heights during the summer were wavering. Apple was down 0.7%, Microsoft slipped 0.6% and Amazon dipped 0.8%. Movements for these behemoths have an outsized effect on the S&P 500 and other indexes that give bigger weights to companies based on their market value.
Trading on Wall Street has gotten even shakier recently as investors contend with a long list of uncertainties, from President Donald Trump’s COVID-19 diagnosis to waxing and waning expectations about Congress’ ability to deliver another round of stimulus for the economy.
The S&P 500 jumped 1.8% on Monday after Trump said he’s returning to the White House to complete his recovery from the coronavirus, though his medical team said he’s still contagious and not yet fully “out of the woods.”
Some investors are also getting more hopeful that another big rescue package may be on the way, even though bitter partisanship on Capitol Hill has been preventing a compromise. Reports on the economy have been mixed recently, as some areas show a slowdown after extra unemployment benefits and other stimulus earlier approved by Congress expired.
In the short term, Democrats and Republicans are continuing their talks on a deal as Election Day draws near. In the longer term, investors are seeing a higher probability for a big stimulus package if Democrats sweep the elections, which Wall Street sees as a likelier possibility than before.
The Federal Reserve’s chair, Jerome Powell, will be giving a speech later Tuesday morning at a virtual meeting for the National Association for Business Economics. He has repeatedly said in recent testimony before Congress and other public announcements that the Fed can’t prop up the economy by itself, even with interest rates at record lows, and that more aid from Congress is likely necessary.
Still, several big challenges lie ahead of markets. Chief among them is the still-raging pandemic, as so clearly illustrated by Trump’s stay in the hospital. The worry is that a ramp-up in infections could cause governments to bring back some of the restrictions they put on businesses early this year, which sent the economy hurtling into a recession.
The upcoming election also still means a host of uncertainty about tax rates and regulations on businesses, while tensions between the United States and China continue to simmer.
In Asian trading, Japan’s Nikkei 225 climbed 0.5%, the Hang Seng in Hong Kong jumped 0.9% and South Korea’s Kospi added 0.3%.
In Europe, Germany’s DAX returned 0.9%, and the French CAC 40 rose 0.9%. The FTSE 100 in London added 0.3%.
The yield on the 10-year Treasury note slipped to 0.77% from 0.78% late Monday. While that’s still incredibly low, the yield has been generally climbing since hitting a low of 0.51% in early August.