Stock market: end of session decline on Wall Street

(Photo: Getty Images)

MARKET REVIEW. Wall Street, weighed down by the decline of major technology stocks, ended lower Tuesday, accelerating its losses at the end of the session after statements by the leader of the Republican majority in the Senate on negotiations around measures to help Americans.

The clues

In Toronto, the S&P/TSX ended the session down 108 points, or 0.65%, to 16,497.

The composite index S&P 500 fell 26 points, or 0.8%, to 3,333 points.

The Dow Jones on Wall Street lost 104 points, or 0.38%, to 27,686 points.

The Nasdaq fell 185 points, or 1.69%, to 10,782 points.

The context

From the start of the session, most of the big names in the tech sector retreated, which particularly weighed on the Nasdaq.

This drop is linked, according to several analysts, to a rotation towards cyclical stocks, dependent on an economic recovery, and implies that investors have greater confidence in the future.

According to Maris Ogg of Tower Bridge Advisors, “fear is no longer the dominant factor and market participants are willing to take a little more risk.”

Tuesday’s optimism is notably linked to the announcement by Russian President Vladimir Putin that Russia had developed the “first” vaccine against the new coronavirus, named “Sputnik V”, and that it gave “lasting immunity” .

The World Health Organization (WHO), however, reacted cautiously to this announcement, recalling that the “prequalification” and approval of a vaccine went through “rigorous” procedures.

However, it reinforces the idea among investors that a vaccine will soon be available even if the virus continues to spread, believes Ms. Ogg.

Less than an hour before the close, the major New York Stock Exchange indices all went into the red after statements on Fox News from Republican Senate boss Mitch McConnell, who was skeptical of the recovery negotiations around new budgetary measures to support the economy.

“The about-face (indices, Editor’s note) was rapid, most likely due to the algorithms, which reacted to the articles on McConnell,” observes Quincy Krosby of Prudential Financial.

The White House and Democrats continue to blame each other after two weeks of tense discussions ahead of the presidential election and the four decrees signed by Donald Trump on Saturday.

However, these temporary measures risk being challenged in court since it is in Congress that the US Constitution vests most of the country’s budget decisions.

“This is also a market where volumes are lighter due to the summer lull and the market can go up or down much faster than usual,” says Krosby.

On the bond market, the 10-year US debt rate rose to 0.6465% around 4:30 p.m. against 0.5755% Monday evening.

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