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Stocks open little changed as Wall Street takes a breather following Monday’s rally

Scott Mlyn | CNBC

Stocks were little changed on Tuesday as the market took a breather following a sharp rally in the previous session while investors assessed whether this rebound can continue.

The quiet move in stocks follows a solid start to the week for stocks during Monday’s session, with the Dow, S&P 500 and Nasdaq Composite popping more than 1% each.

Monday’s rally set up the market to snap losing streaks. The Dow and the S&P 500 have fallen for four consecutive weeks. The Nasdaq Composite managed to break its own three-week streak with a 1% gain last week.

David Waddell, CEO of wealth strategist firm Waddell & Associates, said that he saw recent weakness for the market as a needed “comeuppance” for major tech stocks and that stocks were set for near-term volatility while the indexes treaded water. 

“I think we’re in a sideways period. It’s just we’re going to do it like we’re on a trampoline,” Waddell said. The strategist also said his clients still had a large amount of their assets in cash, suggesting potential support for the market.

The climb for stocks on Monday came after mixed news about the coronavirus response over the weekend. On the bullish side for the market, Florida lifted capacity restrictions on restaurants over the weekend and Pelosi said she believed another relief bill was still on the table

However, cases in the U.S. continued to rise once again, with Dr. Anthony Fauci saying on Monday that the U.S. is “not in a good place” as colder weather approaches. 

Political news is poised to potentially be a driver of market news this week, with the first debate between President Donald Trump and Democratic nominee Joe Biden set for Tuesday night. Some Wall Street analysts believe the first debate of this cycle could be more consequential for the markets than most debates, with a clear victory by one candidate possibly creating significant market moves. 

House Speaker Nancy Pelosi said on Monday night that the Democrats were unveiling a new $2.2 trillion stimulus package, smaller than the more than $3 trillion proposed earlier in the crisis but still well above what Republican leaders have offered. The new bill would include enhanced unemployment benefits and aid to airlines and state and local governments, according to a summary

Don’t miss CNBC and Institutional Investor’s Delivering Alpha conference on September 30, featuring Treasury Secretary Steven Mnuchin, Senator Elizabeth Warren, Alibaba’s Joseph Tsai, Vista Equity Partners’ Robert Smith, J.P. Morgan’s Mary Callahan Erdoes, Inclusive Capital’s Jeff Ubben and more.

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