Stocks tumbled Wednesday, weighed down by some downbeat economic data and the stalemate in Congress over additional fiscal stimulus. On the economics front, a report from IHS Markit showed the recovery in U.S. business activity slowed last month, raising fears that the economy is decelerating as it approaches the end of the third quarter. Meanwhile, the impasse in D.C. over a second round of financial help for businesses and the unemployed continued to hurt investor sentiment. The blue-chip Dow Jones Industrial Average finished the session down 1.9%, or 525 points, at 26,763.
Although stocks gave up early gains on Wednesday morning following disappointing business activity data, strategists noted that the landscape wasn't totally bereft of good news. "On the positive side, Nike posted strong fiscal first-quarter earnings, driven by more than 80% growth in digital sales," writes Argus Research. "Johnson & Johnson also announced the start of a Phase 3 trial of its single-dose coronavirus vaccine candidate."
Other action in the stock market today:
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
- The Nasdaq Composite lost 3%.
- The S&P 500 fell 2.4%
- The small-cap Russell 2000 declined 2.9%.
- Tesla's (TSLA) long-awaited "Battery Day" landed with a thud. The electric vehicle company touted a cheaper, more efficient battery that would lower car prices, but ultimately the Street responded by selling the news. "Tesla’s battery day was long on vision and boldness, but short on specifics and near term deliverables," wrote Bernstein Research. Shares in TSLA dropped 10.3% to $380.36.
Don't Overlook Growth Stocks with a Value Component
It's no secret that growth stocks have outperformed value stocks over the past decade, and they aren't expected to cool off anytime soon. They sure have proven their worth in 2020. Some long-term investors may be put off by the tendency of growth stocks to have pricier valuations and greater volatility, but there's actually no shortage of growth names that have a value component as well. Check out the stocks most favored by the nation's hedge funds, and you'll see plenty of "growth" names that have rock-solid balance sheets, defensible franchises and even steady dividends. Or have a look at the normally poky telecommunications sector, which can claim ownership of some stocks poised for outsized growth thanks to the build-out of 5G mobile networks. And it shouldn't go unnoticed that Warren Buffett -- an investor who hardly takes untoward risk and loves dividends -- has bought a slew of growth stocks for Berkshire Hathaway's portfolio. Indeed, notwithstanding his recent backing of a blockbuster tech IPO, many of Buffett's favorite growth stocks offer investors a comfortable combination of outperformance, income and safety.
-
Stock Market Today: S&P 500, Nasdaq Hit New Highs on Retail Sales RevivalStrong consumer spending and solid earnings for AI chipmaker Taiwan Semiconductor Manufacturing boosted the broad market.
-
Higher Summer Costs: Tariffs Fuel Inflation in JuneTariffs Your summer holiday just got more expensive, and tariffs are partially to blame, economists say.
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have TodayBerkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
-
If You'd Put $1,000 Into Procter & Gamble Stock 20 Years Ago, Here's What You'd Have TodayProcter & Gamble stock is a dependable dividend grower, but a disappointing long-term holding.
-
Stock Market Today: Trump's Copper Comments Cause a StirMarkets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper.
-
Stock Market Today: Trump Reextends His Tariff DeadlineWhen it comes to this president, his trade war, the economy, financial markets and uncertainty, "known unknowns" are better than "unknown unknowns."
-
Stock Market Today: President Trump Reboots the Tariff TradeA broad consensus that markets hate uncertainty more than anything else is being tested on an almost daily basis in 2025.
-
Stock Market Today: Another Quarter, More Mixed Price Action"Up and to the right" remains the general trend despite persistent uncertainty around critical policy issues.
-
The Riskiest S&P 500 Stocks Right NowBuyer beware: These are five of the riskiest stocks in the S&P 500 at the moment, based on one measure of volatility.
-
Stock Market Today: Stocks Chop as Chipmakers DeclineSeveral semiconductor stocks fell Friday on reports that the White House may consider revising license waivers for global chipmakers.
