EconomyEditor's PickNewsDow Cuts Some Losses as Airlines Rise After Pelosi Talks Up Stimulus Progress

1 year ago99 min
imageStock Markets15 minutes ago (Oct 02, 2020 01:19PM ET)

(C) Reuters.

By Yasin Ebrahim – The Dow cut some losses Friday, led by a rise in airlines after House Speaker Nancy Pelosi touted further aid for the industry amid advancing talks in Congress, though a fall in tech kept gains in check.

The Dow Jones Industrial Average fell 0.09%, or 25 points. The S&P 500 fell 0.61% while the Nasdaq Composite slipped 1.91%.

Pelosi said in a statement that lawmakers will provide further aid for airlines either through a broad stimulus package or “bipartisan standalone legislation,” Bloomberg reported.

Airlines climbed on the news, lifting industrials higher, with Delta Air Lines (NYSE:DAL) and United Airlines (NASDAQ:UAL), and American Airlines (NASDAQ:AAL) climbed, with the latter more than 2%.

Pelosi urged carriers including American Airlines and United Airlines Holdings to delay cutting tens of thousands of jobs as the industry has suffered from weaker travel demand owing to the coronavirus pandemic.

The progress on stimulus slightly eased worries over election uncertainty after President Trump confirmed he and his wife had tested positive for the coronavirus and would isolate themselves.

“A positive test result for the President is also a reminder to the market that the virus is far from contained and remains the biggest risk to the economy, the outlook, policy and the election itself,” Stifel said in a note.

The diagnosis comes as fears over the slowing pace of the economic recovery continue after the U.S. created fewer jobs than expected last month, with economists warning of further pain ahead.

The U.S. economy created 661,00 jobs last month, missing economists forecasts of 850,000, while the unemployment rate ticked lower to 7.9%, which beat the consensus of 8.2%.

“Payroll growth is clearly slowing, and the trend is likely to continue. At the start of the recovery, there were 18mln people on temporary layoffs and many of those jobs returned quickly as the economy reopened,” Jefferies (NYSE:JEF) said. Today, there are only 4.6mln left, while the ranks of permanently laid-off workers have swelled to 3.7 million. “This suggests the economy is running out of “low hanging fruit” and sustaining the recent growth will be difficult.”

Tech, however, kept gains in the broader market in check, with Apple (NASDAQ:AAPL) (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB) and Alphabet Inc Class A (NASDAQ:GOOGL), falling more than 2%.

In other news, Peloton Interactive (NASDAQ:PTON) rose 1% after reporting that its subscribers have doubled during the second quarter to over 1 million.

Tesla (NASDAQ:TSLA), meanwhile, reported third-quarter deliveries of 139,300 vehicles, which was ahead of the 137,000, but its shares fell nearly 6%.

Dow Cuts Some Losses as Airlines Rise After Pelosi Talks Up Stimulus Progress

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