By Geoffrey Smith
Investing.com -- U.S. stock markets opened flat on Tuesday, consolidating after two days of gains that will take the edge of what has been a painful September for some.
By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was down 61 points or 0.2% at 27,523 points. The S&P 500 was down 0.1% and the Nasdaq Composite was down by 0.2%.
All three indexes had rebounded sharply over the last two trading sessions, on bargain-hunting driven by the perception that the September sell-off had been overdone.
There was little appetite to take new positions ahead of the first presidential debate between Donald Trump and Joe Biden, which begins at 9 PM ET. A slight acceleration in house prices in July, as measured by the S&P/Case-Shiller index, didn't change that. However, a sharp and unexpected rise in the Conference Board's consumer confidence index provided more tangible evidence of the economy sustaining itself through the onset of a new season of coronavirus infections.
"We see fiscal policy as the most critical area to watch, as it has been helping bridge the economy through the Covid shock," Blackrock (NYSE:BLK) Global Chief Investment Strategist Mike Pyle said in a weekly note, arguing that a Democrat 'sweep' that carried both the White House and the Senate would likely result in more aggressive stimulus than one in which the GOP kept control of the Senate. Re-election for President Donald Trump, Pyle and colleagues argued, would likely result in a fiscal policy outcome between those two extremes, but with the associated risk of more volatility in foreign trade relations.
Just as importantly in the short term, they warned, is the risk that Election Day doesn't produce an immediate result, something that could extend the usual period of underperformance seen in equities as long as election uncertainties run.
Among individual stocks, Beyond Meat (NASDAQ:BYND) stock rose 10% to a 52-week high after it announced that Walmart (NYSE:WMT) will start offering its vegetarian burgers. Dollar General (NYSE:DG) stock also hit a new high for the year on expectations that a sustained period of high unemployment will drive more people to budget outlets.
On the downside, Nikola (NASDAQ:NKLA) stock fell 3.9% after allegations of sexual assault made against founder Trevor Milton, who stepped down as chairman earlier this month. Nikola stock is now down over 70% from its peak earlier in the summer.
Additionally, Caesars Entertainment (NASDAQ:CZR) stock fell 2.5% after pricing its capital increase at $56 a share, raising $1.7 billion. The increase is for general corporate purposes, but is most likely to be used to finance the acquisition of U.K. bookmaker William Hill (OTC:WIMHY).