Indexes end lower, Nasdaq, S&P 500 post 3rd week of declines

Andrew Cummings
September 20, 2020

General Electric Co GE.N rose after Chief Executive Officer Larry Culp said on Wednesday the company's free cash flow would turn positive in the second half.

Major equity indexes in the U.S. started the day in the negative territory on Friday as investors struggle to find a reason to return to risk-sensitive assets.

Notably, after hitting an all-time high of September 2, the tech-heavy Nasdaq had entered into a correction territory last week, while the latest three-week percentage decline in a row had been the Nasdaq's first such losing streak since the August of 2019, and Dow and S&P 500's first since early October 2019.

From the March market lows, "this has been an awesome recovery represented by a few good tech names", said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

Stocks on Wall Street fell sharply at Thursday's opening, with the technology-laced Nasdaq Composite Index leading the rout, a day after the Federal Reserve issued a dire assessment of the United States economic recovery from the COVID-19 pandemic.

The S&P materials is the best-performing sector so far this month, while heavily weighted S&P technology is the worst. Real estate was down 2.2% and financials fell 1%.

Stocks have swirled this week despite the Federal Reserve saying it expects to keep short-term interest rates at record lows.

Adding to concerns about a stalling recovery, the Labor Department's report showed that while fewer Americans filed new claims for unemployment benefits last week, the number remained perched at extremely high levels.

The Dow Jones Industrial Average fell 293.27 points, or 1.05%, to 27,608.71, the S&P 500 lost 45.21 points, or 1.35%, to 3,311.8 and the Nasdaq Composite dropped 164.73 points, or 1.51%, to 10,745.55. Low rates typically turbocharge the market by encouraging investors to pay higher prices for stocks, but some investors may have been looking for the Fed to be even more aggressive. "But if the Fed says we need to keep rates low for longer, then people start worrying about the economy itself".

Ford Motor Co added 3.3% as it said it had begun production of the new generation F-150 pickup truck at its MI facility.

Volume on U.S. exchanges was 14.31 billion shares, the highest since this year's reconstitution by FTSE Russell of its indices in June.

Declining issues outnumbered advancers for a 1.11-to-1 ratio on the NYSE.

The S&P index recorded 10 new 52-week highs and no new low, while the Nasdaq recorded 54 new highs and nine new lows.

Other reports by iNewsToday