Dow Index Falls as Weak Retail Sales Offset Stimulus Optimism
New York (Dec 16) Stocks traded mixed Wednesday as confidence that lawmakers in Washington would agree to a stimulus package was tempered by retail sales data that fell short of estimates.
Wall Street also awaited the latest policy decision from the Federal Reserve.
The Dow Jones Industrial Average fell 52 points, or 0.17%, to 30,146, the S&P 500 gained 0.07% and the Nasdaq was up 0.18%. Stocks ended higher Tuesday, putting an end to the S&P 500's four-session losing streak.
Negotiations in Congress on a coronavirus relief bill have dragged on for weeks, but progress was made during two rounds of meetings between House Speaker Nancy Pelosi and bipartisan congressional leaders.
Senate Majority Leader Mitch McConnell, following a late-night negotiating session Tuesday with Pelosi, told reporters he was "optimistic that we’re gonna be able to complete an understanding sometime soon.” Senate Democratic leader Chuck Schumer and House Minority Leader Kevin McCarthy also took part in the talks, as did Treasury Secretary Steven Mnuchin by phone.
A bipartisan group of lawmakers unveiled a detailed aid proposal of $748 billion on Tuesday.
U.S. consumers dramatically scaled back on their purchases and limited holiday shopping in November as the coronavirus pandemic triggered new business restrictions and outright closures, snapping a six-month stretch of retail sales growth.
U.S. retail sales fell 1.1% to $546.5 billion last month, the Commerce Department reported, down from a revised negative 0.1% pace in October. Economists polled by FactSet had been expecting a decline of 0.3% in November.
"It’s truly the darkest before dawn with a brutal retail sales reading like this," said Mike Loewengart, managing director of investment strategy at E*Trade. "Worse than expected numbers paint a picture of the hard-hit consumer as we capture holiday shopping in November.
"Sustained spending remains key for the recovery, and this pullback only underscores the critical need for stimulus for consumers and businesses alike," he added.
As for the Fed, the central bank is expected to hold rates steady in a target range of 0% to 0.25% but could issue guidance on continued asset purchases, which are now at now $120 billion a month, heading into 2021.
TheStreet
