US stocks close lower on coronavirus concerns and weak retail data

US retail sales rose 0.3% last month, which confirmed the weakest rate of growth in six months

Walmart Inc - Wall Street to start mostly lower at the opening bell

4:05 pm: US equities fall as October retail sales decline

US stocks closed lower as investors paused amid the impact of Moderna’s potential coronavirus vaccine announcement and concerns about the economy.

In addition, sentiment took a hit after data showed retail sales increased less-than-expected in October. Retail sales rose 0.3% last month, versus a 0.5% gain expected by economists.

On the day, the Dow Jones Industrial Average fell 167 points, or 0.56%, to 29,783. The S&P 500 declined 0.48% to 3,609 and the tech-heavy Nasdaq dropped 0.21% to 11,899.

12.20 pm: US benchmarks seeing red at mid-session

US stocks were lagging at mid-session as traders digested weak retail sales data and fretted about the pandemic and its economic repercussions.

The Dow Jones Industrial Average dropped over 174 points at 29,776. The S&P 500 lagged nearly 14 points at 3,612, while the tech-laden Nasdaq exchange shed nearly 18 points at 11,906.

Official figures showed that retail sales rose 0.3% last month, which confirmed the weakest rate of growth in six months.

Yesterday, there were 166,581 new  coronavirus (COVID-19) cases on Monday in the USA, while over the last week, the US has averaged 155,442 cases a day, up 82% from the average two weeks ago.

"The fact Donald Trump is refusing to admit defeat in the US presidential election and handing over power to Joe Biden is another worry the markets would rather avoid," said Fawad Razaqzada, analyst at ThinkMarkets, in a note.

"It is not clear how Joe Biden would tackle the current virus situation in the US, but the president-elect has warned that the longer Trump refuses to hand over power, the more lives could be lost."

The analyst added: "Experts warn that Thanksgiving and Christmas should be cancelled this year to help bring down the infection rate. Hospitalization has hit a new high, while the 7-day average of deaths has risen to levels not seen since the summer."

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9.42am: Wall Street mostly red

The main Wall Street indices were decidedly mixed to negative in early trading on Tuesday morning, with US retail sales data greeted with a shrug by traders.

In the first minutes of trading, the Dow Jones Industrial Average was down 1% at 29,658, while the S&P 500 fell 0.63% to 3,604. The Nasdaq, meanwhile, was mostly flat at around 11,921.

Investors in New York appeared little moved by US retail sales data for October, which came in as expected with a 0.3% rise over the month.

One winner on Tuesday morning was electric car maker Tesla Inc (NASDAQ:TSLA), which jumped 11% to US$453 in early deals after the stock joined the S&P 500 index.

At the losing end, pharmacy chains Walgreens Boots Alliance Inc (NASDAQ:WBA) and CVS Health Corp (NYSE:CVS) dropped 8% to US$40.55 and 3.7% to US$68.38 following news that e-commerce giant Amazon Inc (NASDAQ:AMZN) has muscled its way into the sector with the launch of its own online pharmacy service.

7.35am: Wall Street to start mostly lower at the opening bell

US investors are set for a pause for breath when trading starts later today.

Spread betting quotes indicate the Dow Jones Industrial Average will open at around 29,786, 14 points down on last night’s close.

The S&P 500 is expected to kick-off at around 3,609, down 18 points, but the NASDAQ Composite is tipped to go its own way and open 117 points firmer at 12,041.

“Tesla will be in play today as it was announced that the electric vehicle manufacturer will be admitted to the S&P 500 index in late December. This has been in the offing for some time now, but the confirmation should push up demand seeing as index trackers will need to buy it for their funds,” explained CMC’s David Madden.

Tesla Inc (NASDAQ:TSLA) was up more than 13% in pre-market trading.

Meanwhile, Neil Wilson of markets.com reports that Airbnb announced plans to press on with its stock market listing this year despite the obvious hit to the travel sector from the pandemic.

“In a filing on Monday the company reported it had made a profit of $219 million in the third quarter, on $1.34 billion in revenue. This was down on a small amount from the $227 million in profit during the same quarter last year – its only profitable quarter in 2019 – which was on $1.65 billion in revenue; however the first half of the year was exceptionally tough for Airbnb as it chalked up net losses of $916 million on revenue of $1.18 billion,” Wilson said.

Five things to watch for on Tuesday:

  • There are a few big names on the earnings calendar on Tuesday, with retailer giant Walmart Inc (NYSE:WMT) due to report its figures for the third quarter
  • Also in the diary is DIY products retailer Home Depot Inc (NYSE:HD), which is scheduled to post results for its third quarter
  • On the macroeconomic front, US retail sales for October are expected to rise 0.5% month-on-month after climbing 1.9% in September
  • US industrial production, meanwhile, is tipped to be up 1.0% or so month-on-month, which would be the largest rise in three months
  • Economists will also be keeping an eye out for the NAHB housing market index for November, which is expected to remain unchanged from October’s 85

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