Stocks Edge Up Ahead of Election Day
The major U.S. equity averages finished last week's truncated trading week -- when exchanges were closed for several days because of Hurricane Sandy -- with steep losses on Friday as the October jobs report fell flat ahead of the election.
On Monday, the Institute for Supply Management said its services index fell to 54.2 in October from 55.1 in September, vs. the average economist estimate of 54.5 for last month.
"October's U.S. ISM non-manufacturing index provides more evidence that GDP will grow at an annualized rate of around 2% in the fourth quarter. The decline in the index ... reversed only part of the previous month's gain to leave the index with a small upward trend," noted Paul Dales, senior U.S. economist at Capital Economics.
Overseas markets were in the red Monday, as investors around the world anxiously awaited the outcome of the U.S. elections. The FTSE 100 in London closed down 0.5%, while the DAX in Germany lost 0.51%, with Greece getting ready to approach parliament with a new austerity plan, a sequential increase in Spanish jobless claims last month, and the European Central Bank assessing whether it has been too generous on terms on Spanish bank loans.Japan's Nikkei average finished down 0.48% and Hong Kong's Hang Seng closed down 0.47% Monday as a private study of China's services sector declined in October. Gold for December delivery rose $8 to settle at $1,683.20 an ounce at the Comex division of the New York Mercantile Exchange, while December crude oil contracts added 79 cents at $85.65 a barrel. The benchmark 10-year Treasury rose 10/32, pushing the yield down to 1.685%. The dollar was up 0.22%, according to the U.S. dollar index. In corporate news, Tesla (TSLA) shares popped nearly 9% after the electric vehicle company announced that its manufacturing rate is now at over 200 cars a week or 10,000 cars a year, which is at the critical threshold needed for Tesla to generate positive operating cash flow. The company also reported wider-than-expected third-quarter loss and higher than expected revenue.
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