The Dow Jones Industrial Average fell on Wednesday amid the publication of mixed macroeconomic data and increased number of COVID-19 patients in the United States.
Earlier this week, stock markets were growing sharply amid promising news on the COVID-19 vaccine. To add to that, news came that the transfer of power from incumbent US President, Donald Trump, to President-elect, Joe Biden, should take place without incidents, so additional optimism was given to investors.
Unfortunately, the persistent rise of COVID-19 infections in the country seriously restrains the optimistic sentiments of the market. Concerns over the re-introduction of strict quarantine measures affect consumer behavior, most especially since more than 88,000 patients were hospitalized on Tuesday due to the virus.
Therefore, on Wednesday, the DJIA fell by 173.77 points (0.6%) and closed at 29872.47 points, while the S&P 500 index decreased by 5.76 points (0.2%) and to 3629.65 points. As for the NASDAQ Composite, it grew by 57.62 points (0.5%) and valued 12,094.40 points, which became a new record since early September. Experts predict that further growth of the indices may be limited.
The markets are hoping to find balance between the short-term forecasts associated with the alarming wave of COVID-19 and the medium-term prospects associated with an effective vaccine and a rapid economic recovery.
At the moment, the weekly statistics published by the US Department of Labor exerted pressure on the market, especially since according to the data, jobless claims in the US have increased, which means that the stubborn growth of COVID-19 cases are negatively affecting the labor market. The report said initial applications increased to 778,000, against the projected 730,000.
Despite that, the US Department of Commerce said the country's economy grew by 33.1% in the third quarter.
Orders for durable goods also rose stronger than expected, the same as consumer spending for October, which increased for the sixth month in a row, albeit minimal.
Meanwhile, consumer income fell 0.7% (against an expected growth of 0.1%) amid declining government support.
As for consumer confidence, the index for November slipped to 76.9 points, which was the lowest level since August this year.
The decrease in consumer income and increase in jobless claims raise fears in investors about the short-term prospects of the economy (against the background of no fiscal support from the government).
Government bonds also fluctuated after the publication of the November Fed protocol, since according to the report, the central bank may amend its bond purchase program to further stimulate the US economy. However, executives said they were not exactly sure whether they would take this step in the future.
Nonetheless, in connection with a thorough assessment and analysis of the latest statistics in the US, stock indices closed on Wednesday with multidirectional dynamics.
Stocks of HP Inc. increased by 2.3%, since in the 4th fiscal quarter, the American IT company recorded huge sales of personal computers due to the transition to remote work.
Deere & Co. declined 1.94% despite an agricultural equipment maker's report of better-than-expected profit and revenue in the fourth fiscal quarter.
General Electric Co. jumped by 0.5%, even though the day before, the management warned employees about new cuts in the aircraft engine division due to the negative impact of the coronavirus pandemic on civil aviation.
Gap Inc. lost 20.0% after the company announced that its sales for the 3rd quarter remained practically unchanged year-on-year. Gap also said it was concerned about declining store traffic during the winter holiday sales season due to the COVID-19 pandemic.
Dell Technologies Inc. declined 1.4% despite a nearly 60% increase in profits in the third fiscal quarter.
Salesforce.com Inc. decreased by 5.4%, so the company is currently in talks to buy the shares of Slack Technologies Inc. As a result, Slack's share price jumped 37.6%.
As for commodities, North Sea WTI oil increased by 1.8% to $ 45.71 per barrel, while gold rose by 0.1% and traded around $ 1,805.70 per troy ounce.
STOXX Europe 600 also fell 0.1% at the close of the trading session.
Meanwhile, Asian stock indices closed in different directions. Some experts say the reason for this is the news about the active development of an effective COVID-19 vaccine, while the others say this is due to the uncontrolled increase of coronavirus infections.
Shanghai Composite decreased by 0.13% to 3 358.01 points, while the Shenzhen Composite dropped by 0.73% to 2237.74 points.
The Hong Kong Hang Seng Index rose 0.01% to 26,672.52 points, while the South Korean KOSPI jumped 0.14% to 2,605.27 points.
Japan's Nikkei 225 also jumped 0.55% to 26,443.47 points, while Australia's S & P / ASX 200 fell 0.61% to 6642.3 points.
