Log in

Global shares fall back after Wall Street rebound

Friday, October 30, 2020 | Joe Mcdonald, AP Business Writer

A currency trader walks by screens showing the foreign exchange rates and the Korean Securities Dealers Automated Quotations (KOSDAQ) at the foreign exchange dealing room in Seoul, South Korea, Friday, Oct. 30, 2020. Asian stocks sank Friday as investors looked ahead to next week's U.S. presidential election and weighed the chances of economic stimulus from Washington and Europe.(AP Photo/Lee Jin-man)

BEIJING (AP) — Global stocks and U.S. futures sank Friday as investors looked ahead to next week's American presidential election and weighed the chances of economic aid from Washington and Europe.

London and Frankfurt opened lower, while Tokyo, Hong Kong and Seoul all declined. Shanghai closed lower after swinging between gains and losses.

Investors have been dismayed by a lack of progress in talks between the White House and Congress on new U.S. stimulus. Hopes for action ahead of Tuesday's election and potential wrangling over the outcome have diminished.

“The market is still in search of that elusive stimulus lifeline in this mishmash of pre-election de-risking,” Stephen Innes of Axi said in a report.

In early trading, the FTSE 100 in London lost 0.7% to 5,542.62 and Frankfurt's DAX was 1.1% lower at 11,470.85. The CAC 40 in France retreated 0.9% to 4,528.95.

On Wall Street, futures for the S&P 500 index and the Dow Jones Industrial Average were down 1.8%.

In Asia, the Nikkei 225 in Tokyo fell 1.5% to 22,977.13 and the Hang Seng in Hong Kong lost 2.1% to 24,073.72.

The Shanghai Composite Index sank 1.5% to 3,224.53. It swung between gains and losses after the ruling Communist Party said Thursday it wants to make a China a self-reliant “technology power” amid a feud with Washington that is hampering access to high-tech components.

The Kospi in Seoul retreated 2.6% to 2,267.15 and Sydney's S&P-ASX 200 was 0.6% lower at 5,927.60.

India's Sensex lost 0.9% to 39,404.79. New Zealand, Singapore and Bangkok retreated.

On Thursday, the S&P 500 rose 1.2%, helped by a rebound for tech stocks as the market steadied after its worst drop in four months.

The index fell 3.5% on Wednesday on worries an upsurge in coronavirus infections could drag down the economy again.

Traders welcomed data that showed the number of U.S. workers applying for unemployment benefits eased last week to 751,000. That was down from the previous week's 791,000 and better than economists expected.

The Dow Jones Industrial Average gained 0.5% while the tech-heavy Nasdaq composite climbed 1.6%.

In Washington, House Speaker Nancy Pelosi sent a letter to Treasury Secretary Steven Mnuchin listing topics in their stimulus negotiations on which she is awaiting a reply. They include benefits for laid-off workers and measures on coronavirus testing.

Also Thursday, the head of the European Central Bank said there's “little doubt” it will deliver more stimulus in December.

In China, the ruling party said Thursday its next five-year development plan starting next year will emphasize self-reliance in technology.

The party gave no details but aid to technology developers could help Chinese makers of smartphones and other products that face possible difficulty in obtaining U.S. components after the Trump administration imposed export restrictions in a fight over security, spying and Beijing's development plans.

Coronavirus case numbers are rising in the United States and Europe, increasing worries that restrictions on business might be re-imposed. Retailers worry customers might stay away even if sweeping lockdowns don't come back.

In energy markets, benchmark U.S. crude lost 31 cents to $35.86 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.22 on Thursday to $36.17. Brent crude, the price standard for international oils, declined 39 cents to $37.87 per barrel in London. It lost $1.47 the previous session to $37.65.

The dollar declined to 104.33 yen from Thursday's 104.67 yen. The euro advanced to $1.1681 from $1.1671.

7 Stocks That Could Provide a Year-End Rally

It’s rough in the markets right now. Underlying the volatility is uncertainty. The VIX Index (INDEXCBOE: VIX) otherwise known as the Fear Index is unofficial, but an eerily accurate predictor of market sentiment. And the VIX is up 30% in the last month.

Is this uncertainty due to concerns over additional lockdown measures? Is it about the lack of additional coronavirus stimulus? Is the market reacting to a surge in jobless claims? Or is this just the somewhat normal volatility that comes in an election year that promises to be like none in American history.

The answer is all of the above and then some. But does that mean you should stay out of equities? I don’t think so. Where are you going to go? The Fed has promised interest rates are going nowhere fast. And that bit of news is weighing down the bond market.

So stocks it is. But although growth-seeking investors may be tempted to look at the tech sector to see what’s on sale today, I suggest taking a more targeted approach. Rather than looking at a single sector, try to look at solid performers in different sectors that may be ready to surge over the last three months.

The pandemic brought the entire market down. But once investors took a breath they found bargains. And if you had the courage to put your money to work in those stocks, you’ve been rewarded.

Times like these call for the same type of courage. And that’s why we’ve put together this special presentation with seven stocks that look ready to surprise investors with nice end-of-year gains.

View the "7 Stocks That Could Provide a Year-End Rally".

Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.