US open: Stocks head south as Trump tests positive for Covid-19, non-farm payrolls disappoint

(Sharecast News) - Wall Street stocks opened lower on Friday as news that Donald Trump and the First Lady had tested positive for Covid-19 and a weaker-than-expected non-farm payrolls report weighed on sentiment.
As of 1545 BST, the Dow Jones Industrial Average was down 0.84% at 27,582.53, while the S&P 500 was 0.83% weaker at 3,352.61 and the Nasdaq Composite came out the gate 1.15% softer at 11,195.81.

The Dow Jones opened 234.37 points lower on Friday, reversing modest gains recorded in the previous session as the fourth quarter of 2020 got underway on a positive note for stocks amid a slew of data points.

Trump's revelation that he had contracted the coronavirus weighed on sentiment before the open, adding a heightened degree of uncertainty to the upcoming US general election in November, stimulus negotiations and the pace at which Covid-19 containment measures may be relaxed across the country.

White House physician Dr Sean Conley said Trump and the First Lady were "both well" and stated they planned to "remain at home within the White House during their convalescence". Conley added that the president was expected to "continue carrying out his duties without disruption" while recovering.

Also in focus was news that the House had passed a $2.2trn Democratic Covid-19 stimulus bill overnight. However, while Republicans continue to oppose the package, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin agreed to continue to hold talks on reaching a bipartisan agreement.

On the macro front, the US jobs market continued to show signs of slowing down last month, according to the Department of Labor, as non-farm payrolls grew by 661,000 in September, undershooting forecasts for an increase of 865,000.

However, unemployment did surprise to the downside, falling from 8.4% to 7.9%, beating forecasts of 8.2% by a hefty margin, and figures for the prior two months combined were revised up by 145,000 to also somewhat help offset the miss.

SpreadEx's Connor Campbell said: "The initial panic sparked by Trump's case of the Covids seemed to cool somewhat as the day went on, despite a pretty awful non-farm jobs report providing fuel for the fire.

"Nothing is set in stone, however, and the Dow Jones could still have a wobble before the session is over. It's also going to be fascinating to see how the markets wake up on Monday morning, following what is set to be another major weekend in terms of geopolitical headlines."

Elsewhere, the Institute for Supply Management's New York Index for September reported significant short-term improvements in current business conditions and revenues. Current business conditions gained back the losses reported in August, increasing 13.2 points to 56.1 in September. However, the six-month outlook fell from 61.7 in August to 48.9 in September.

Still on data, the University of Michigan's final consumer sentiment index for September climbed to 80.4 from a preliminary reading of 78.9 as Americans seemingly grew more optimistic about the economy toward the end of the month.

Lastly, factory orders rose for the fourth straight month in August, according to the Commerce Department, which revealed orders for manufactured goods rose 0.7% after a 6.5% gain in the prior month.

From the Fed, Federal Reserve Bank of Philadelphia head Patrick Harker said the central bank's new framework will allow for slightly higher inflation to help close employment gaps but governments and employers need to do more to make sure those gains reach lower-income workers.