Wall Street dips, ends three-day rally ahead of quarter's end, U.S. presidential debate

NEW YORK (Reuters) – Wall Street dipped on Tuesday, snapping a three-day winning streak as investors took money off the table ahead of the end of the quarter and hours before the first presidential debate.

Workers prepare the stage for the first presidential debate between U.S. President Donald Trump and Democratic U.S. presidential nominee and former Vice President Joe Biden on the campus of the Cleveland Clinic in Cleveland, Ohio, U.S. September 28, 2020. REUTERS/Jonathan Ernst

All three major U.S. stock indexes were down. In a reversal from Monday, market leaders Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com AMZN.O weighed heaviest on the S&P 500 and the Nasdaq.

“It’s profit-taking after several solid back-to-back rallies,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “It’s end-of-the-quarter portfolio window dressing.”

“I don’t think it’s anxiety over the debate,” Cardillo added.

Market participants eyed the first head-to-head showdown between President Donald Trump and Democratic challenger Joe Biden in a debate expected to air from Cleveland Tuesday evening.

“Whoever tonight’s winner might be will have no effect on the markets,” Cardillo said. “The market has to a degree discounted a Democratic victory and it will be business as usual.”

The latest poll shows Biden leading nationally and in a number of key battleground states.

While a win by either candidate has implications for different sectors, notably healthcare, green energy and beneficiaries of Trump’s corporate tax cuts, Goldman Sachs analysts expected a Democratic sweep of the White House and both chambers of Congress would be beneficial to S&P 500 profits through 2024.

In the closing days of September and the second quarter, the major indexes are on track to post their first monthly declines since March, when the mandated shutdowns brought the economy to a grinding halt.

But despite September’s expected loss, the S&P and the Nasdaq are on course for their best two-quarter winning streaks since 2009 and 2000, respectively.

U.S. House of Representatives Speaker Nancy Pelosi unveiled a new, $2.2 trillion coronavirus relief bill proposed by House Democrats, a sign of potential progress in the partisan tug-of-war over the new aid package nearly two months after emergency unemployment benefits expired for millions.

The proposed package gave airlines some hope for a second bailout, just days before tens of thousands of layoffs are expected to occur.

Still, the S&P 1500 Airline index .SPCOMAIR was down 2.8%.

Stocks were given a brief boost early in the session by data from the Conference Board, which showed consumer confidence surging past expectations this month with the largest point gain in 17 years.

The Dow Jones Industrial Average .DJI fell 99.88 points, or 0.36%, to 27,484.18, the S&P 500 .SPX lost 10.65 points, or 0.32%, to 3,340.95 and the Nasdaq Composite .IXIC dropped 9.55 points, or 0.09%, to 11,107.98.

Of the 11 major sectors in the S&P 500, energy .SPNY and financials .SPSY suffered the largest percentage losses.

Sorrento Therapeutics SRNE.O jumped 12.1% after the company’s COVID-19 antibody candidates showed promise in a study.

Fitbit Inc FIT.N advanced 6.3% after Reuters reported Alphabet Inc GOOGL.O was poised to win EU approval for its $2.1 billion acquisition of the fitness tracker maker.

Declining issues outnumbered advancing ones on the NYSE by a 1.72-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored decliners.

The S&P 500 posted 6 new 52-week highs and no new lows; the Nasdaq Composite recorded 59 new highs and 31 new lows.

(Corrects to adds dropped word in first paragraph)

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