Wall Street Rallies Wednesday 09/30 15:48
U.S. stocks rallied on Wednesday, but only after zooming up, down and back
up again in a fitting end to what was a wild month and quarter for Wall Street.
NEW YORK (AP) -- U.S. stocks rallied on Wednesday, but only after zooming
up, down and back up again in a fitting end to what was a wild month and
quarter for Wall Street.
Prospects for additional support from Congress for the economy helped drive
the day's trading, as they have for weeks. The S&P 500 shot to a gain of as
much as 1.7% after Treasury Secretary Steven Mnuchin told CNBC that he would
talk with House Speaker Nancy Pelosi about a potential deal in the afternoon,
"and I hope we can get something done."
But the gains nearly vanished as pessimism rose about Washington's ability
to get past its partisanship and send economic aid that investors say is
crucial. The S&P 500 hit its low for the day just after Pelosi said she and
Mnuchin "found areas where we are seeking further clarification," though she
said talks will continue.
By the end of trading, momentum had returned, and the S&P 500 rose 27.53
points, or 0.8%, to 3,363.00. The Dow Jones Industrial Average gained 329.04,
or 1.2%, to 27,781.70, and the Nasdaq composite added 82.26, or 0.7%, to
It was the last day of a strong quarter for the market, where the S&P 500
rallied 8.5% to follow up on its 20% surge in the spring. Continued support
from the Federal Reserve helped drive the gains, as the central bank leaned
further into the whatever-it-takes approach taken to support markets and the
economy. After already cutting interest rates to nearly zero, the Fed said
during the quarter that it may keep interest rates low even after inflation
runs above its target level.
But momentum slowed sharply at the end of the quarter, and the S&P 500 lost
3.9% in September for its first monthly loss since the market was selling off
in March. A long list of worries dogged Wall Street, headlined by concerns that
the Big Tech stocks dominating the market simply got too expensive following
their tremendous run to records.
Other worries include rising tensions between the United States and China,
as well as the uncertainties swirling around the upcoming U.S. elections.
Trading has also been notably erratic recently, with momentum veering
sharply in several different directions during a single day.
On Wednesday, the S&P 500 careened between a gain of 0.1% and 1.7% for a
total spread of 1.6 percentage points. That was typical for the month, marking
the median for September. It's also twice as wide as the median over the last
10 years, 0.8 percentage points.
The tumult has come as the economy's strong rebound earlier this year
following the easing-up of lockdowns has slowed. The number of layoffs has
remained stubbornly high, for example, and The Walt Disney Co. said late
Tuesday that it plans to lay off 28,000 workers because of government
restrictions due to the pandemic that are hurting its theme parks.
Other areas of the economy have also seen growth slow since the expiration
of extra unemployment benefits and other economic aid that Congress approved
"We all knew that the small businessman or restaurant owner was getting
hurt, but this takes it to a different level of just how serious it is," said
J.J. Kinahan, chief strategist with TD Ameritrade. "It maybe changes the
narrative a bit."
A report from payroll processor ADP on Wednesday gave some encouragement,
though. It said hiring by private employers accelerated this month, with
749,000 jobs added versus economists' expectations for 605,000. Other economic
reports on Wednesday also came in stronger than expected, including one on
business activity in the Chicago area.
That raises hopes for the federal government's more comprehensive jobs
report, which arrives on Friday. For that, economists had been expecting to see
hiring slowed to 850,000 from 1.4 million in August.
This month's jobs report will take on even more importance than usual
because it will be the final one released before Election Day in November.
Tuesday night's debate between President Donald Trump and the Democratic
nominee, Joe Biden, was the first of this election season, and it amplified
some of the market's concerns. Trump said it may take months to learn the
election's results, and such a long period of uncertainty could make an already
shaky market even more volatile.
But several analysts said they didn't see the debate having a big effect on
the stock market, whose path depends much more on what happens with corporate
profits, interest rates and the coronavirus pandemic than who sits in the White
"Last night was pretty much a nothing burger from a market perspective,
other than perhaps suggesting more uncertainty in the weeks ahead, which could
continue to drive volatility," said Mike Loewengart, managing director of
investment strategy at E-Trade Financial.
Trump again lobbed claims of fraud at the voting process, even when the head
of the FBI has said there has not been any significant coordinated national
voter fraud. The tone was combative through the night, with plenty of insults
and talking over one another, and reflective of the country's deepening
Shares of data-mining company Palantir jumped 31% to $9.50 on their first
day of trading. The company was born 17 ago with the help of CIA seed money.
Palantir isn't selling new shares to raise money. Instead, it's listing
existing shares for public trading.
In Europe, Germany's DAX fell 0.5%. The CAC 40 in Paris fell 0.6%, and
London's FTSE 100 shed 0.5%.
In Asia, Japan's Nikkei 225 lost 1.5%, Hong Kong's Hang Seng rose 0.8% and
stocks in Shanghai slipped 0.2%.
The yield on the 10-year Treasury rose to 0.68% from 0.66% late Tuesday.