Wall Street slides after Mnuchin dims stimulus hopes

In this news, we discuss the Wall Street slides after Mnuchin dims stimulus hopes.

(Reuters) – Wall Street fell on Wednesday, led lower by Amazon and Microsoft, as investors lost hope that a fiscal stimulus would be approved before the November presidential election.

Adverse comments from Treasury Secretary Steven Mnuchin that a deal is unlikely to be reached before the vote added to the shaky sentiment following a mix of quarterly earnings reports from major Wall Street lenders.

“At this point it would be difficult to do something before the election and execute it, given our situation and the level of detail, but we will try to keep working on these issues,” Mnuchin said during the meeting. ‘a conference. sponsored by the Milken Institute.

U.S. stocks had rallied in recent sessions over optimism the government would provide further impetus to reduce damage from the coronavirus pandemic.

“Optimism took root like a rocket last week and now it’s coming back to earth a bit,” said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York. “I think a stimulus as a big macro event is already built into stock prices. It’s just a matter of when the details emerge and when the stimulus takes effect.

Amazon fell 2% and Microsoft fell 0.8%, both weighing more than any other stock in the S&P 500.

The Dow Jones Industrial Average was down 0.56% to 28,520.54 points, while the S&P 500 lost 0.66% to 3,488.78.

The Nasdaq Composite fell 0.85% to 11,763.32.

Bank of America and Wells Fargo fell 4% and 5% respectively after disappointing quarterly results, while Goldman Sachs rose 0.5% as strong trading activity helped boost quarterly profits by 94%.

The S&P 500 banks index fell 1.4%.

The third quarter earnings season begins, with signs of general improvement in expectations about the severity of damage to U.S. businesses from the pandemic. Analysts expect earnings to fall 19% from a year earlier, according to data from Refinitiv IBES, from a 25% decline expected on July 1.

Markets have also started to digest the prospect of a Democratic victory, strategists and fund managers have said.

While many investors view Democratic candidate Joe Biden as more likely to raise taxes, they are increasingly highlighting the potential benefits of a Biden presidency, such as higher infrastructure spending and less business uncertainty. global.

UnitedHealth Group Inc fell 2.7% despite increasing its earnings forecast, as the U.S. insurer said it was difficult to predict the impact of the pandemic on earnings.

Falling issues outnumbered those that rose on the NYSE by a ratio of 1.22 to 1; on the Nasdaq, a ratio of 1.63 to 1 helped the declines.

The S&P 500 posted 22 new 52 week highs and no new lows; the Nasdaq Composite recorded 106 new highs and 10 new lows.

Additional reports from Medha Singh and Shivani Kumaresan in Bengaluru; Edited by Marguerita Choy

Original © Thomson Reuters

Originally posted 2020-10-14 11:46:09.

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