Stock Market Today 10/2/20: Dow Holds Up Better Than Expected but Tech Stocks Get Creamed
A double-whammy of bad news before the opening bell had traders anticipating an ugly day for stocks.
Stocks for the most part held up better than expected after a one-two punch of bad news threatened to end the trading week with a thud.
The early Friday morning announcement that President Donald Trump tested positive for coronavirus slammed equity futures ahead of the opening bell. And then the premarket release of the September jobs report, which showed a steep deceleration in the pace of recovery, did traders no favors either.
But an announcement by House of Representatives Speaker Nancy Pelosi that she anticipates striking a bipartisan economic relief deal with the Trump administration went a long way toward buoying the market's spirits. An "imminent" deal to provide another $25 billion in aid to the airline industry also bolstered sentiment.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free 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.
At Friday's close, the blue-chip Dow Jones Industrial Average slipped less than 0.5% to finish at 27,682. The broader S&P 500 declined almost 1% to 3,348. Only the Nasdaq Composite had a rough time of it, as some of the market's hottest stocks this year -- Apple (AAPL), Amazon.com (AMZN) and Microsoft (MSFT), to name just three -- became sources of cash. The tech-heavy index tumbled 2.2% to close at 11,075.
Other action in the market today:
- The S&P 500 lost 1% to close at 3,348.
- The small-cap Russell 2000 gained 0.5% to end at 1,539.
- Gold slipped 0.5% to $1,907 an ounce.
- The 10-year Treasury note finished at 0.696%.
The market mostly dodged what was shaping up to be a day of wicked volatility, but it seems certain that the reprieve won't last long.
It's an old adage that the market hates uncertainty, and now we're swimming in it. The president's positive COVID-19 test, just a month before the election, would have been sufficient to spook investors as we enter the final quarter of the year. The continued wrangling in D.C. over further stimulus and signs that the economy is losing steam only add to the anxiety.
Fortunately there are a number of strategies that investors can deploy to take the edge off heightened volatility. One idea is to allocate more of your portfolio to diversified bond funds. And speaking of funds, don't sleep on diversified, high-quality (but low-fee) mutual funds run by seasoned stock pickers who have skin in the game. You could also shift more capital into market sectors that hold up better when volatility is running high. Sector funds are an easy way to gain exposure to defensive parts of the market, and they're diversified too.
Lastly, for tactical investors who like to pick their own stocks, now might be a good time to take a closer look at low-volatility stocks. These names can help stabilize a portfolio when the market is having a rough ride.
-
Stocks Chop as the Unemployment Rate Jumps: Stock Market TodayNovember job growth was stronger than expected, but sharp losses in October and a rising unemployment rate are worrying market participants.
-
Should You Renew Your CD?With rate cuts impacting earnings, we examine if now is a wise time to renew CDs.
-
7 Ways to Plan Now to Save on Medicare IRMAA Surcharges LaterUnderstand the critical two-year lookback period and why aggressive planning before you enroll in Medicare is the most effective way to minimize IRMAA.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
-
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.
