US stocks closed higher on Tuesday after the first presidential debate between Hillary Clinton and Donald Trump knocked out the negative flows of a sharp fall in oil prices.
Pundits on Wall Street said Clinton came out of the debate the winner, to maintain her narrow lead for the White House with voters.
The S&P 500 gained 0.6% to 2159, with information technology and consumer discretionary rising 1% to lead the advancers. The stock which began by leading the ticker higher, and later pulled back also finished top of the table again. First Solar Inc (NASDAQ:FSLR) was up 4.9% to $39.09. It is one of the stocks most likely to benefit from a Clinton election victory. Read more.
There was also market cheer for some data releases. The Consumer Confidence Index hit 104.1 in September, the Conference Board said on Tuesday. Economists expected the Index to hit 99.0, down from August's revised reading of 101.8, according to a Thomson Reuters consensus forecast. The print was also the highest since the 2008 recession.
Meanwhile, the S&P CoreLogic Case-Shiller 20-City Composite index rose 5.0% year-on-year, slightly below the expected 5.1% gain.
The September Markit Flash US Services PMI was also released, showing expansion.
Investors also kept an eye on oil prices, as US crude futures fell 3% to $44.55 per barrel as hopes for an output-limiting deal during an oil producer meeting in Algeria faded. On Monday, the West Texas Intermediate rose more than 3%.
But, just like the immediate response to a growing risk that Deutsche Bank (NYSE:DB) may not receive German aid and lead to a collapse in Europe on a scale to match Lehman Brothers in 2008, markets were focused away from the oil sector as well as the banking sector.
The S&P Midcap 400 ended up 0.1% at 1544 and led higher by Synnex Corp (NYSE:SNX) up 9.8% to $116.62.
The S&P Smallcap 600 closed up 0.3% at 752 and was led higher by Universal Technical Institute Inc (NYSE:UTI) up 7.1% to $1.67.
Midsession
US stocks remained higher at midsession on Tuesday but upside was curbed after Deutsche Bank’s share price hit a record low and sent valuations to a 30-year nadir.
The S&P 500 index remained well above water, up 0.6% at 2159 while the S&P Midcap 400 advanced by 0.3% to 1546 and the S&P Smallcap 600 gained 0.3% to 752.
But a combination of weaker oil prices on disappointment around Algiers as well as growing worries over Deutsche Bank began to sap away at the initial gains on Wall Street following Monday night’s televised US Presidential debate which appeared to cement Hillary Clinton’s slim lead over opponent Donald Trump.
In New York, Deutsche Bank ADRs (NYSE:DB) were putting on a brave face, surfing on the crest of Wall Street’s wave and up 0.4% at $11.90.
But with the German government refusing to comment on whether it will offer assistance to the country’s biggest lender, there are some analysts and investors who fear a European version of the US Lehman Brothers bank collapse that heralded the 2008 crisis.
Any risk to Deutsche Bank could further undermine the euro zone, at a time its authority and integrity are being challenged by Britain’s decision to vote to quit the wider European Union.
“Despite the positive start to the day for markets in the aftermath of the presidential debate, the dramatic fall in shares in Deutsche Bank has been a hard fall back to reality. The last few weeks have seen the recently troubled bank’s shares drop as much as 30%, with today’s record low bringing the firm to its worst valuation in 30 years,” said Paresh Davdra, CEO and Co-Founder of RationalFX.
Open
US stocks advanced on Tuesday after investors viewed the first US presidential debate as having been a clear-cut victory for Hillary Clinton, with some stocks, such as First Solar, lining up to take advantage.
The market was also supported by US consumer confidence having jumped to its highest level in more than nine years, as low oil prices and the continued improvement in the labour market bolstered sentiment among American consumers.
The Conference Board’s gauge rose to 104.1 in September from a revised 101.8 the month prior, confounding Wall Street expectations for a retreat to 99.
Early opinion polls suggested Clinton, considered on balance as Wall Street’s darling in spite of her zeal for more financial regulation and war on pharma stocks, had won over voters more than her opponent Donald Trump.
During the TV screening, Trump accused the Federal Reserve of being more political than Clinton.
The S&P 500 market bellwether was up 0.4% at 2,154 and led by First Solar Inc (NASDAQ:FSLR) up 3.4% at $38.51. The semiconductors business gained on word that Clinton was ahead for the White House race.
Clinton’s campaign has pledged to install 500mln solar panels by the end of her first term, roughly 7 times today’s capacity. This would give a huge boost for the otherwise struggling solar industry. First Solar has been one of the lone outperformers in the space, consistently topping earnings and revenue quarter after quarter.
SolarCity (NASDAQ:SCTY), whose chairman is Elon Musk, might not see as much upside given its deep-seated structural flaws and financial problems. On Tuesday, its shares crept up 0.7% to $20.12.
The S&P Midcap 400 was up only 0.05% at 1543, and led by Synnex Corp (NYSE:SNX) up 9.7% at $116.43. The company reported third-quarter results on Monday.
But small stocks were in the red. The S&P Smallcap 600 was down 0.1% at 749 and led by Tidewater Inc (NYSE:TDW) down 9% at $2.21.
Pre-Open
US stocks were indicated to open higher on Tuesday as investors responded positively to the previous night’s first televised US presidential debate.
Early opinion polls suggested Hillary Clinton, considered on balance as Wall Street’s darling in spite of her zeal for more financial regulation and war on pharma stocks, had won over voters more than her opponent Donald Trump.
Trump accused the Federal Reserve of being more political than Clinton.
Trump's central argument is that the Federal Reserve is keeping interest rates low to help the economy look good under President Obama.
Trump said earlier this month that Fed chair Janet Yellen should be "ashamed of herself" for keeping interest rates low and creating a "false stock market."
Last week, Yellen emphatically denied any political influence.
Meanwhile, Yellen’s number two, Stanley Fischer, is due to speak at 1615 EDT, which is right after markets close. Fischer is hawkish and earlier this month released rate hike mania which later led to others wading in, such as Boston’s Eric Rosengren.
But holding back gains on Tuesday, crude oil was back in the red, with Brent down 2.2% at $46.33 a barrel and West Texas Intermediate down by 2% at $45.04 a barrel, after Saudi Arabia’s energy minister cast doubt on the chances of a deal emerging from this week’s meeting of big oil producers in Algiers.
Among data releases that bear the power to lightly rock the market, are the US Redbook as well as September Markit PMI flash estimate.