Futures subdued after mixed results from big USA banks

Stimulus bets prop up S&P Nasdaq futures

Third-quarter earnings season is getting underway, with signs of overall improvement in expectations of how badly US companies have been hurt by the pandemic.

On Tuesday, independent monitors paused enrolment in a study testing the COVID-19 antiviral drug remdesivir plus an experimental antibody therapy being developed by Eli Lilly. Apple bounced back from an early slide and eked out a 0.1% gain.

The S&P 500 banks index ticked 0.2% lower. The Russell 2000 index of small-cap stocks fell 12.21 points, or 0.7%, to 1,636.85.

The S&P 500 opened higher by 3.54 points, or 0.10%, at 3,515.47 and the Nasdaq Composite gained 25.18 points, or 0.21%, to 11,889.07 at the opening bell. About halfway through October, the major stock indexes have recouped most of their losses from last month's market swoon.

Applications to refinance a home loan dropped 0.3% and homebuyer mortgage applications declined 1.6% despite the average fixed 30-year mortgage rate falling one basis point to a fresh record low of 3.00%.

Investors have been expecting more aid after the November 3 presidential election in the event Congress fails to agree on a deal in the next three weeks.

JPMorgan Chase, Johnson & Johnson and Apple are holdings in Jim Cramer's Action Alerts PLUS member club. But they're forecasting the decline to moderate from the almost 32% plunge from the spring as the economy has shown signs of improvement.

Their stocks, though, closed mixed.

The shares of the major banks JPMorgan and Citigroup lost more than one and a half and nearly five percent, respectively, despite good quarterly figures. Johnson & Johnson dropped 2.3% and Eli Lilly fell 2.9%.

Other airlines and travel-related companies were also weak, and Royal Caribbean dropped 13.2% for the biggest loss in the S&P 500.

The yield on the 10-year Treasury note fell to 0.71% from 0.74% late Tuesday despite a report showing that inflation at the wholesale level strengthened more than economists expected last month. Dow member Johnson & Johnson posted earnings that beat analyst expectations and raised its full-year profit guidance.

Disney rallied 3.2% after announcing a major company reorganization with streaming at the forefront of its business.

On the data front, US Consumer Price Index increased 0.2 per cent in September on a seasonally adjusted basis after rising 0.4 per cent in August, the US Bureau of Labor Statistics reported Tuesday. Senate Majority Leader Mitch McConnell said the Republican-led Senate would vote next week on a targeted $500 billion coronavirus aid bill of the type Democrats have already rejected as they hold out for trillions in relief.

House Speaker Nancy Pelosi told fellow lawmakers in a letter that the White House's proposal for new coronavirus aid has insufficient offers on health-care issues.

The market is still waiting for progress in the negotiations on a new Corona economic stimulus program - with the approaching American presidential election, hopes of an early breakthrough are apparently dwindling.

In European stock markets, the German DAX returned 0.1%, and the French CAC 40 fell 0.1%.