U.S. stocks stumbled Monday ahead of the first presidential debate, closing near session lows as oil prices rose and banking issues fell.
The Dow Jones Industrial Average, S&P 500 and Nasdaq composite all shed about 0.9%. Conservative investments did somewhat better with the Dow Jones Utility Average inched down 0.25%.
Volume in the stock market today was running lower on both major exchanges as the major indexes headed toward their third session in a row of declining volume.
The stock market faces two uncertainties that might be encouraging fund managers to stand back.
The presidential debate between Republican Donald Trump and Democrat Hillary Clinton is scheduled for 9 p.m. ET. Any surprises at the two-candidate debate could move the market one way or another. Polls show both candidates are intensely disliked. Their populist impulses have left Libertarian Gary Johnson positioned to grab potentially the biggest third party vote since 1996, when businessman Ross Perot was also excluded from the debates but got 8% of the vote. And Green Party candidate Jill Stein threatens to roil conditions further.
Why should candidates with little chance of winning matter to investors? A strong third party vote can create uncertainty in otherwise safe states, complicating the electoral college outlook for the major parties. And the stock market hates uncertainty.
Economic data also could shake the Street. The final take on second quarter GDP is expected to be released Thursday before the market's open. The Street expects GDP to come in at 1.3% vs. the prior readings of 1.1% and 1.2%. The range of estimates for the final number run from 1.1% to 1.5%, according to Econoday. The GDP number could affect the outlook on interest rates.
IBD'S TAKE: Doubts surrounding both the presidential campaign and the final GDP figure are keeping some money on the sidelines.
Meanwhile, the price of West Texas intermediate crude oil settled at $45.93 Monday, up $1.45, or 3.3%. Oil prices and oil stocks rose as top producers offered concessions to cap output ahead of an informal meeting in Algiers on Wednesday.
U.S. oil and gas explorer stocks led the day's big gainers. Texas-based Concho Resources (CXO) popped 1.2% in weak volume as the big cap tried to retake its 50-day line. Texas-based Clayton Williams Energy (CWEI) added 1.5% in above-average volume and then reversed to a small gain; the stock is about 35% above its 50-day line. Oklahoma-based Continental Resources (CLR) advanced 0.5% in below-average volume as it battled to reclaim its 50-day line.
Among blue chips, Wells Fargo (WFC) tried to find support near the 45 level, an area that provided support in February and June. This is an especially crucial support area in the light of recent scandals. Still, Wells Fargo shares fell 1.9% to 44.88, its first below 45 since February 2014.
Wells Fargo is accused of opening 2 million accounts without customer approval in 2011-15, while big bank stocks in general retreated Monday on Fed proposals to raise capital levels.
Warren Buffett's Berkshire Hathaway (BRKA) is Wells Fargo's largest shareholder. Buffett told Fox Business News on Thursday that he would not comment on the Wells Fargo scandal until November.
In the IBD 50, a proxy for top-rated stocks, five stocks fell for every two that rose. Gainers included RV maker Thor Industries (THO), which angled 1.4% higher in heavy volume. The midcap stock has been climbing since bouncing off its 50-day line Sept. 12. Thor reports earnings after the market close.
RELATED:
New Home Sales Fall From Nine-Year High But Top Views
Fed To Force JPMorgan, Citi, BofA, Other Top Banks To Hold More Capital
