Stock Market Today: Dow Rebounds Despite Infrastructure Bill Delay - Barron's

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Congress faces the challenge of raising or suspending the U.S. debt ceiling by Oct. 18.

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The Dow Jones Industrial Average was trying to avoid starting October the way it ended September after a vote on the $1 trillion infrastructure package was delayed Thursday night. Economic data on Friday were largely better-than-expected.

By midmorning, the Dow was up 132 points, or 0.4%, after being down more than 200 points early Friday morning. The S&P 500 was essentially flat, while the Nasdaq Composite was down 0.4%. The Dow and the S&P 500 just had their worst Septembers since 2011.

While the decision by House Democrats not to vote on the infrastructure bill has gotten all the attention, one factor helping stocks was better-than-expected economic data overseas. The U.K. Purchasing Managers Index, for instance, came in at 57.1 for September, higher than the preliminary reading of 56.3.

“The economic data was pretty good,” said Tom Essaye, founder of Sevens Report Research. After having been down overnight, “markets [are] kind of flailing around.”

Economic data in the U.S. also rolled in, with personal income for August rising 0.2% month-over-month, in line with expectations. Personal spending rose 0.8%, better than the expected 0.7%. Investors want to see that spending remains healthy, as companies are having trouble meeting demand with supply.

Core inflation rose 0.3% in August, higher than the expected 0.2% and the same as July’s result. Investors are paying close attention to inflation data, especially as the Federal Reserve revealed in its most recent update it is more likely to raise interest rates in 2022.

While stocks were wavering, the more economically sensitive ones were rising firmly, partly seen by the movement in the Dow, which is comprised heavily of such stocks.

The Dow saw its worst September since 2011, as markets fretted about a range of issues including central bank stimulus, inflation, supply-chain issues, a debt crisis in China, and a global energy crunch.

Plus: A Vote on Biden’s $1 Trillion Infrastructure Bill Was Delayed. Watch These Stocks.

The delayed infrastructure vote came amid debate among Congressional Democrats over the second part of Biden’s agenda—a hallmark $3.5 trillion budget reconciliation package addressing the U.S. social safety net and climate change initiatives. It could get a vote Friday.

Also read: House Delays Infrastructure Vote as Divisions Persist Among Democrats

Congress also faces the challenge of raising or suspending the U.S. debt ceiling before Oct. 18 to avoid a federal default.

Overseas, in Asia, Japan’s Nikkei 225 fell 2.3% as analysts noted traders in Tokyo were focused on events globally, with Chinese markets closed. The pan-European Stoxx 600 was down 0.3%, as European stocks have found themselves under pressure from a strengthening dollar this week. The greenback has climbed 1.3% relative to the euro since Monday.

Here are nine stocks on the move Friday:

Zoom Video Communications (ticker: ZM) stock rose 1.3% after the company and software company Five9 (FIVN) agreed to end their deal talks. 

Merck (MRK) rose 7.8% after revealing positive trial data for a Covid-19 oral antiviral.

Keurig Dr Pepper (KDP) stock gained 2.4% after the company announced a $4 billion share buyback program. 

Southwest Airlines (LUV) stock rose 4.5% after getting upgraded to Overweight from Neutral at JPMorgan. 

General Mills (GIS) stock rose 0.8% after getting upgraded to Buy from Neutral at Citigroup. 

Dollar Tree (DLTR) fell 1.2% after getting downgraded to Sector Weight from Overweight at KeyBanc Capital Markets. This comes after the stock has soared this week as the company announced it is increasing its buyback program and raising prices. 

Universal Music Group (UMG.Netherlands) rose 4.4% in Amsterdam after JPMorgan initiated stock coverage of the company, which went public last week, with a “buy” rating.

Airbus (AIR.France) fell 0.8% in Paris despite news that Italian carrier ITA moved to lease 31 jets from the company and buy 28 more.

Vestas (VWS.Denmark) fell 2,3% in Copenhagen despite winning a major order for an undisclosed wind project in Canada.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

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Stock Market Today: Dow Rebounds Despite Infrastructure Bill Delay - Barron's
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