U.S. Stocks Waver as Investors Brace for Volatile Trading
By Caitlin Ostroff
U.S. stocks wavered Friday but remained on track to finish
another tumultuous week with slim gains.
The S&P 500 slipped 0.3% shortly after the opening bell. The
tech-heavy Nasdaq Composite was little changed. The Dow Jones
Industrial Average lost about 120 points, or 0.4%.
The occurrence of so-called quadruple witching -- when both
futures and options linked to individual stocks and stock indexes
expire on the same day -- means investors are braced for a choppy
session. A surge in options trading targeted at giant technology
stocks by both small and large investors has also been magnifying
the market's ups and downs in recent days.
"It is normally a day where you're glued to your screen and
you're watching for volatility," said Altaf Kassam, head of
investment strategy for State Street Global Advisors in Europe.
"We've had an abnormal amount of options on single stocks, so you
might see some movement in single stocks."
In corporate news, shares of Oracle lost 0.7% after the Trump
administration said it would block downloads of TikTok and the U.S.
use of Chinese messaging and payment app WeChat. Under the latest
plan for a majority U.S. ownership of Chinese-owned video-sharing
app TikTok, Oracle and Walmart could together own a significant
stake, The Wall Street Journal reported.
Analysts said investors are watching for progress in Covid-19
vaccine trials and monitoring economic data to assess how much
stocks can climb, following a rebound from March lows.
"If you think about it, we've had all the easy gains," said Mr.
Kassam. "It's going to get incrementally harder for us to keep
pushing up that hill."
Also on Friday, lawmakers are aiming to unveil a bipartisan
spending bill averting a government shutdown next month. Democrats
and Republicans remain at an impasse over another round of
coronavirus relief despite President Trump's renewed interest in a
The breakdown in negotiations has disappointed some investors
who expected another relief package would lend more spending power
to Americans and boost economic recovery. Additional support could
bolster consumer spending, which powers two-thirds of the U.S.
Markets have taken a damper this week after the Federal Reserve
said the U.S. economic outlook remains highly uncertain. Some
investors were disappointed that the central bank didn't offer more
guidance around additional stimulus measures or specifics about its
Speculation that the Fed would keep interest rates near zero for
some years, resulting in low bond yields, has been encouraging many
people to move funds into riskier assets. That has led to a rally
"This is a once-in-a-generation ability to make money," said
Patrick Spencer, managing director at U.S. investment firm Baird.
"That announcement from the Fed was very powerful, and it's going
to try and inflate inflation and that's good for stocks."
Overseas, the pan-continental Stoxx Europe 600 fell 0.5%.
In Asia, China's Shanghai Composite Index led regional gains,
with a more than 2% rise by the close of trading, helped by rallies
in financial stocks. State-owned China Life Insurance and New China
Life Insurance both surged by 10%, the maximum daily gain allowed,
as did broker Zheshang Securities.
Foreign investors have added to their holdings of Chinese
stocks, helping bolster the yuan, which in recent days has hit its
strongest levels against the dollar since May 2019.
Elsewhere, major indexes in Hong Kong, Japan and South Korea
advanced less than 0.5%, while the Australian benchmark fell
--Joanne Chiu and Gunjan Banerji contributed to this
Write to Caitlin Ostroff at firstname.lastname@example.org
(END) Dow Jones Newswires
September 18, 2020 10:44 ET (14:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.