US stocks close down as election jitters mount ahead of debate

Wall Street’s main stock indexes skidded lower on Tuesday as investors steered clear of big bets ahead of Tuesday’s first presidential debate, and concerns mount that there may not be a clear winner in the days – and perhaps weeks – that follow election night.

The Dow Jones Industrial Average finished the session down 0.48 percent at 27,452.66.

The S&P 500 – a gauge for the health of US retirement and college savings reports – closed down 0.48 percent, while the tech-heavy Nasdaq Composite Index finished down 0.29 percent.

President Donald Trump and his Democratic opponent Joe Biden will take to the stage on Tuesday evening in Cleveland, Ohio – five weeks before the November 3 election. National polling shows Biden in the lead in key battleground states.

As the campaigning roars on, millions of laid-off Americans are facing the prospect of not returning to work anytime soon while they wait for Congress to pass another round of much needed federal virus relief aid.

Democrats in the House of Representatives, led by Nancy Pelosi, are preparing a $2.2 trillion stimulus package. But the likelihood of both Republicans and Democrats in Congress agreeing to pass the package is not looking good given the increasingly contentious political season.

Rising political tensions in the US has caused growing volatility on Main Street, where ‘mom and pop’ family-run and independent businesses have shuttered, many to never reopen again. On Wall Street, stock market volatility is setting in.

Stock analysts meanwhile are trying to read the tea leaves of what a Biden victory could mean for the economy.

Goldman Sachs analysts predict that a Biden win and a Democratic sweep of the Senate and House of Representatives would “have only a modest net impact” for S&P 500 profits through 2024.

“Our analysis suggests that the combined effects of higher corporate tax rates, more fiscal spending, and lower tariffs would likely result in a similar level of medium-term S&P 500 profits as our baseline forecast that assumes no major policy changes,” the analysts wrote in a Tuesday note.

In economic news on Tuesday, Consumer confidence bounced back more than expected in September, the Conference Board reported.

Its consumer confidence index increased to a reading of 101.8 this month from 86.3 in August.

Consumer spending is the heartbeat of the US economy and it remains highly uncertain how long the optimism will last.

Unless Congress manages to pass a new stimulus bill, a fresh wave of layoffs and evictions could take hold and gut confidence.

Among stocks making headlines on Wall Street on Tuesday: Beyond Meat closed up 9.49 percent after the plant-based meat producer announced that its products will be available in 2,400 Walmart stores starting next week.

Fitbit shares finished the session up 5.77 percent after the Reuters news agency reported Alphabet’s unit Google is poised to win European Union antitrust approval for its $2.1bn acquisition of fitness tracker maker. The move would open the door for Fitbit to take on Apple and Samsung in the wearable technology market.

Drugmaker Sorrento Therapeutics shares closed up 14.28 percent after the firm reported that both of its COVID-19 antibody candidates showed good results in a study.

And shares of electric truck start-up Nikola close down 7.35 percent after two women came forward with formal sexual assault allegations against founder Trevor Milton.