Stocks were mixed last week as worries that stretched from Washington D.C., where prospects of a new fiscal stimulus bill dimmed, to Europe, which saw an increase of new COVID-19 cases.
The Dow Jones Industrial Average declined 1.75%, while the Standard & Poor’s 500 fell 0.63%. The Nasdaq Composite index gained 1.11% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 4.20%.1,2,3
Late Friday Rally Pares Losses
The weakness in technology persisted. The Department of Justice proposal to curb legal protections for internet companies and require them to take greater responsibility for the content on their sites adding to that sector’s woes.4
Energy stocks were also hit hard on concerns of a slowdown in economic growth hurting oil demand.
The week wasn’t entirely absent of good news. Investors focused on reports of new progress in developing a vaccine and the passage in the House of Representatives of a bipartisan continuing resolution bill to fund the government through December 11th.5
Absent any apparent catalyst, stocks rallied in the final days of the week, cutting losses on major indices and powering the Nasdaq Composite to a weekly gain.
Fiscal Stimulus on Life Support
Many economists and market observers, along with Federal Reserve Chairman Jerome Powell, believe that further spending may be needed to maintain the momentum of the current economic recovery.
THIS WEEK: KEY ECONOMIC DATA
Source: Econoday, September 25, 2020
THIS WEEK: COMPANIES REPORTING EARNINGS
Source: Zacks, September 25, 2020
1. The Wall Street Journal, September 25, 2020
2. The Wall Street Journal, September 25, 2020
3. The Wall Street Journal, September 25, 2020
4. The Wall Street Journal September 23, 2020
5. CNN.com, September 22, 2020
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