Third Straight Day Of Losses For US Stocks

US stocks posted their third straight day of losses yesterday, with every day of third-quarter earnings season so far ending in the red. Pharmaceutical and biotech names made up the bulk of the S&P 500’s worst performers of the day, with Vertex Pharmaceuticals (VRTX) at the bottom of the pile with a 20.7% loss after announcing it is stopping the development of a key experimental liver drug. United Airlines (UAL) was also amongst the worst performers, closing the day 3.8% lower in reaction to the $1.8bn loss it reported in its earnings report after the market closed on Wednesday.

Elsewhere, there were some bright spots in corporate earnings. Following the record profits Goldman Sachs posted, Morgan Stanley announced it grew profits 25% year-over-year in Q3. CEO James Gorman argued that the firm should be allowed to resume share buybacks given its strong position, after a ban on major banks doing so due to the Covid-19 downturn was recently extended to the end of the year.

In the UK, Boris Johnson will today set out his response to the EU’s request for concessions in the Brexit deal. This will precede London entering a new stricter phase of lockdown at midnight tonight following a resurgence in cases. Despite this, the FTSE 100 is up a touch over 1% as a weaker GBP helps exporters.

Walgreens Boots jumps after profit forecast improves

Of the three major US stock indices, the Nasdaq Composite fell the furthest yesterday at -0.5%, but still remains up more than 30% year-to-date. The Dow Jones Industrial Average had the best day, closing close to flat, boosted by a 4.8% jump in Walgreens Boots’ (WBA) share price following its earnings report. The drugstore giant beat analyst profit expectations and management forecasted that it expects to grow profits by single digits in 2021.

One factor impacting investor sentiment yesterday was a rise in US initial weekly jobless claims – a measure of new claimants signing up for unemployment benefits. The figure has been stuck in the 800,000 to 900,000 range since mid-August, but Thursday’s 898,000 was the highest reading in that period.

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