Stocks Mixed in Choppy Trading as Uncertainties Linger…..

U.S. stocks closed mixed following a choppy day of trading as investors assessed positive earnings results against concerns regarding the ultimate economic impact from the rise in new COVID-19 cases across the U.S. and Europe. An uncertain political backdrop also added to investor hesitation with no clear end to the fiscal relief standoff. Earnings data continued to be a source of optimism, highlighted by encouraging results from Dow members Caterpillar, 3M Company and Merck & Co, however forward guidance remained in short supply. M&A activity was again in focus, with Advanced Micro Devices agreeing to acquire rival chipmaker Xilinx in an all-stock transaction valued at about $35.0 billion. Durable goods orders came in stronger than expected, and regional manufacturing output jumped to a record, though Consumer Confidence surprisingly slipped. Treasury yields dipped, alleviating recent pressure on bond prices and the U.S. dollar moved down. Gold and crude oil prices were higher. Asia finished mixed and Europe closed lower amid concerns of rising cases of COVID-19 and a flood of data, headlined by an upbeat earnings report from HSBC.

The Dow Jones Industrial Average fell 222 points (0.8%) to 27,463, the S&P 500 Index was down 10 points (0.3%) at 3,391, and the Nasdaq Composite gained 72 points (0.6%) to 11,431. In moderate volume, 796 million shares were traded on the NYSE and 3.0 billion shares changed hands on the Nasdaq. WTI crude oil was $1.01 higher at $39.57 per barrel and wholesale gasoline added $0.03 to $1.13 per gallon. Elsewhere, the Bloomberg gold spot price rose $5.66 to $1,907.74 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—declined 0.1% at 92.96.

Durable goods orders top forecasts, Consumer Confidence dips, regional manufacturing jumps

September preliminary durable goods orders grew 1.9% month-over-month (m/m), versus the Bloomberg estimate of a 0.5% rise and compared to August’s downwardly-revised 0.4% increase. Ex-transportation, orders rose 0.8% m/m, versus forecasts of a 0.4% gain and compared to August’s upwardly-adjusted 1.0% increase. Moreover, orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, were up 1.0%, compared to projections of a 0.5% rise, while the prior month’s figure was favorably-revised to a 2.1% increase.

The Conference Board’s Consumer Confidence Index unexpectedly declined to 100.9 in October, from September’s downwardly-revised 101.3 level, and versus estimates calling for an improvement to 102.0. The index surprisingly softened as a solid improvement for the Present Situation Index portion of the survey was more than offset by a drop in the Expectations Index of business conditions for the next six months. On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—moved further into positive territory, rising to 6.6 from the 3.3 level posted in September.

The Richmond Fed Manufacturing Activity Index showed expansion (a reading above zero) hit a record this month. The index jumped to 29, versus forecasts calling for the figure to dip to 18.0 from September’s 21.0 level. Growth in new orders accelerated and shipments surged, while employment growth remained steady.

The 20-city composite S&P CoreLogic Case-Shiller Home Price Index posted a 5.2% y/y gain in home prices in August, versus estimates of a 4.2% increase. Compared to the prior month, home prices were up 0.5% on a seasonally adjusted basis, in line with forecasts.

Treasuries ticked higher, with the yield on the 2-year note little changed at 0.15%, while the yields on the 10-year note and the 30-year bond decreased 3 basis points to 0.77% and 1.56%, respectively.

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