US stocks closed lower on Thursday, extending their losses to the longest since the credit crisis of 2008, as election jitters haunted investors again.
The session began well, as the S&P 500 market bellwether gained, but later on that reversed. On Wednesday a seven-day losing streak became the longest since 2011. On Thursday, an extra day, and it became the longest since the depths of the 2008 crisis which caused the collapse of bank Lehman Bros and an historic Fed rate cut that we are only just now seeing the back of.
The S&P 500 index dropped by 0.4% to 2,088, and was led south by Endo Int'l Plc (NASDAQ:ENDP), down 19.5% to $14.63. The company reports its third quarter earnings on Nov. 8.
The second-biggest decliner was First Solar Inc (NASDAQ:FSLR) down 15% to $34.51 after the company’s third quarter earnings report lowered its revenue guidance to the band of $2.8–$2.9bn from $3.8–$4bn projected earlier.
The losses on Wall Street were heavier than in Toronto, where the TSX Composite ended down 0.08% at 14,583 and led to a dip by Alaris Royalty Corp. (TSE:AD), down 5.5% to C$18.78.
During the past eight days the S&P 500 has dropped by 2.9% as investors have braced for the uncertainty now into the US presidential election race with Hillary Clinton’s lead in polls against Donald Trump narrowing dramatically - and one on Wednesday showing Trump in the lead - with the presidential election looming just days away.
The Vix index, a measure of expected equity volatility that is often referred to as Wall Street’s fear gauge, rallied 14.2% on Thursday to its highest level since the aftermath of the June 23 UK Brexit vote. It has surged by more than 50% in the past month.
But at least someone was cashing in on the political developments. Growth in subscription streaming and political advertising drove record third-quarter earnings and revenues for CBS (NYSE:CBS). The broadcasters third quarter earnings after the bell resulted in shares rising by 1.3% to $56.20 after hours.
Meanwhile, a clutch of US data was mixed and didn’t give much of a steer on whether the Fed will dogmatically follow through with a rate hike in December, or hold off until the new President is in office and the political landscape is clearer.
The S&P Midcap 400 was off 0.2% to 1476 and led by Treehouse Foods (NYSE:THS) down 19.5% to $69.72 after a rash of legal actions came to the surface immediately after the company announced its third quarter earnings.
The S&P Smallcap 600 was down 0.3% to 703 and led by Diplomat Pharmacy Inc (NYSE:DPLO), down a harsh 42% to $12.95 after its third quarter earnings.
After the bell, there was a mixed bag of earnings. Starbucks (NASDAQ:SBUX) posted upbeat fourth-quarter profits on Thursday after the coffee chain said comparable sales rose four per cent in the US last quarter. But their shares had no froth after hours, flat at $51.77.
But perhaps one of the worst performers after the bell was GoPro (NASDAQ:GPRO).
GoPro’s sales plunged by 40 per cent to $241m in its third quarter, well below Wall Street’s estimates of $316m. Already 7% down during the session, the results sent the shares down 19.9% to $9.57 after hours.
Early trading
US shares were firmer on Thursday, buoyed by a mixed bag of data stateside, while oil stocks were powered by companies reporting narrowed losses.
The S&P 500 market bellwether was up 0.1% at 2100 and led by oil stocks including Marathon Oil Corp (NYSE:MRO), up 13.5% to $14.50, after the company’s loss narrowed sharply in the third quarter, helped by higher-than-projected production and lower costs, its overnight earnings report showed.
Marathon said it plans to increase rig activity by about 50% by year's end, while staying within its planned $1.3bn capital-spending budget.
Oil prices, however, were softer on Thursday. The US benchmark West Texas Intermediate was down 0.1% to $45.29.
But data was having an impact on the market too.
Initial jobless claims rose last week to 265,000 – its highest level since early August. That was higher than the 256,000 Wall Street economists had forecast.
Adding to the downside for markets but also tempering rate hike risks for December, the pace of expansion in the vast US services sector cooled more than economists forecast in October, as employment growth slowed and price gains picked up steam.
The Institute for Supply Management’s non-manufacturing purchasing managers index clocked in at 54.8 last month, from 57.1 in September. Wall Street economists expected a shallower fall to 56.
Still, the figure is still well above the 50.0 mark which denotes economic expansion.
But in positive news, US factories continue to see an uptick in orders in September, the latest sign that the country’s manufacturing sector is regaining some steam following a lacklustre start to the year.
Orders to US factories rose 0.3% in September, a shade higher than the 0.2% increase analysts were expecting.
The S&P Midcap 400 was up 0.3% at 1484 and led by Wpx Energy Inc (NYSE:WPX) up 12.3% to $11.86 as, just like Marathon Oil, it reported a narrower-than-expected third quarter loss.
The S&P Smallcap 600 index was up 0.5% to 709 and led by Inteliquent Inc (NASDAQ:IQNT), up 35.8% to $22.76 after agreeing to be snapped up by private equity firm, GTCR for $800mln.
GTR will pay $23.00 per share, representing a 37% premium to Inteliquent's closing stock price on November 1.
Pre-Open
US shares are poised for a generally higher open after the Fed didn't move a muscle on interest rates and Mark Carney, governor of the Bank of England, in the UK did the same.
Wall Street shares closed lower on Wednesday, as risks of a December rate hike grew, oil prices sagged, and the S&P 500 index sustained its longest slide since 2011.
Janet Yellen also stood pat on interest rates ahead of next Tuesday's monumental Presidential election but did signal a possible rise in December.
Commentators said that inflation stateside was now showing signs of behaving the way Federal Reserve officials want it to.
It's all happening over in the UK today as a High Court ruling saw the government's bid to trigger Article 50 without a Parliamentary vote defeated.
It means there is now likely to be a vote in the House of Commons before the mechanism to leave is triggered and throws the whole Brexit process further into chaos. It sent the pound higher against the US Dollar and the Euro.
The UK Central Bank today warned that inflation will hit 2.7% next year and admits the economy is doing better than it expected but it kept interest rates at 0.25%.
On Wall Street, the S&P 500 closed down 13 at 2,097, the tech heavy Nasdaq was down 48, at 5,105, while the Dow Jones closed down 77 at 17,959.
Futures have the S&P500 3.75 higher; the Nasdaq lower a tad by 0.25 and the Dow Jones up 36 points.