Stocks Fall Monday as Aid Hope Fades 10/19 16:09
Stocks gave up some of their recent gains Monday as Wall Street's hopes that
Washington will come through with badly needed aid for the economy before
Election Day faded.
(AP) -- Stocks gave up some of their recent gains Monday as Wall Street's
hopes that Washington will come through with badly needed aid for the economy
before Election Day faded.
The S&P 500 dropped 1.6%, its worst day in more than three weeks. The
benchmark index had been up 0.5% in the early going following a report that
China's economy grew at a 5% annual rate in the last quarter. The market's
slide was broad, though technology, health care and communication stocks bore
the brunt of the selling. Treasury yields were mixed.
The early gains evaporated by midafternoon ahead of another round of talks
between Democratic and Republican leadership over a long-sought economic
stimulus bill. Wall Street is expecting that lawmakers will agree on new
stimulus measures for the economy, but the odds of that happening before the
Nov. 3 election have dimmed. Over the weekend, House Speaker Nancy Pelosi said
a deal would have to come within 48 hours -- or by Tuesday -- for a stimulus
package to be enacted by Election Day.
Uncertainty over when more aid for the economy may arrive, signs new
coronavirus infections are surging and the upcoming election will likely make
for a volatile few weeks, analysts say.
"We're in a period here in the the next couple of weeks where the market
goes sideways through the election," Terry Sandven, chief equity strategist at
U.S. Bank Wealth Management.
The S&P 500 fell 56.89 points to 3,426.92. The Dow Jones Industrial Average
of big blue chips dropped 410.89 points, or 1.4%, to 28,195.42. The Nasdaq
composite extended its losing streak to a fifth day, losing 192.67 points, or
1.7%, to 11,478.88.
Small company stocks also fell. The Russell 2000 gave up 20.18 points, or
1.2%, to 1,613.63. The index has gained 7% so far this month, outpacing the
1.9% gain for the broader S&P 500.
Stocks have been mostly pushing higher this month after giving back some of
their big gains this year in a sudden September swoon. The benchmark S&P 500
has notched a gain in each of the past three weeks. Even so, trading often has
been choppy from one day to the next, reflecting uncertainty over the timing of
more stimulus for the economy, something investors have been hoping for since
July, when a supplemental $600-a-week unemployment benefit package ran out.
Senate Majority Leader Mitch McConnell is expected to bring a his version of
a stimulus bill to the floor of the Senate for a vote on Wednesday. However
that bill is likely to get zero traction with the Democrat-controlled House of
Representatives. So far, McConnell, Pelosi and President Donald Trump have not
been on the same page.
Pelosi and Treasury Secretary Steven Mnuchin spoke Monday and are due to
resume talks Tuesday, Pelosi spokesman Drew Hammill tweeted after the end of
Investors were also looking ahead to another busy week of corporate earnings
reports. Procter & Gamble, Netflix and American Express are a few of the
companies that will reveal the extent of the virus pandemic's impact during the
most recent quarter.
Across the S&P 500, analysts are expecting companies to report another drop
in profits for the summer from year-ago levels. But they're forecasting the
decline to moderate from the nearly 32% plunge from the spring as the economy
has shown signs of improvement.
AMC Entertainment was among the few gainers Monday. Its shares jumped 16.4%
after the movie theater chain said it plans to resume operations in theaters in
New York State later this week.
Several airlines also rose after the Transport Security Administration said
the number of passengers screened in a single day for flights in the U.S.
topped one million on Sunday for the first time since the coronavirus cases
began to spike in March. That compares with 2.6 million passengers screened by
TSA on the same day last year, or roughly 60% fewer. United Airlines rose 3.9%
and Southwest Airlines edged up 0.4%.
ConocoPhillips fell 3.2% after the oil giant announced it would buy Concho
Resources for $9.7 billion. The deal is the largest in the oil industry since
crude prices plummeted this year due to the COVID pandemic. Concho lost 2.8%.
European stocks closed broadly lower, and Asian markets ended mixed.