Stocks Tumble as Wall Street Monitors Stimulus Negotiations
New York (Oct 19) Stocks declined Monday as Wall Street monitored signs of progress on a U.S. stimulus package before the Nov. 3 presidential election.
The Dow Jones Industrial Average fell 153 points, or 0.54%, to 28,452, the S&P 500 fell 0.58% and the Nasdaq was down 0.4%.
House Democrats and the White House are expected to meet later Monday.
After weekend negotiations with Treasury Secretary Steven Mnuchin, House Speaker Nancy Pelosi set a deadline of Tuesday for settling on terms of a relief package if there is any hope of sealing an agreement before the election.
Pelosi said the 48-hour deadline from Saturday "only relates to if we want to get it done before the election, which we do.
"We’re saying to them, we have to freeze the design on some of these things - are we going with it or not and what is the language? I’m optimistic, because again we’ve been back and forth on all this,” Pelosi told ABC News.
However, opposition to a large stimulus package - President Donald Trump has said he's willing to go above $2.2 trillion - exists in the Republican-controlled Senate.
Investors will be watching a flood of earnings reports this week, including from International Business Machines (IBM) - Get Report on Monday and Netflix (NFLX) - Get Report, Tesla (TSLA) - Get Report and AT&T (T) - Get Report later in the week.
Third-quarter earnings estimates have improved modestly since the start of the reporting season two weeks ago, but are still forecast to fall 18.7% from last year.
Confirmed cases of the coronavirus in the U.S. crossed 50,000 for a fifth consecutive day.
"While we notched another week of gains, volatility is still high and the VIX closed elevated, suggesting traders and investors alike should remain on guard as the election draws near," said Chris Larkin, managing director of trading and investment product at E*Trade.
"This is a packed week for earnings, which will help paint a clearer picture of how our economy is faring throughout the pandemic, while also delivering near-term opportunities for traders," Larkin added. "We also woke up this morning to renewed hopes for a stimulus bill, fueled by an accelerated rise in new cases, which in a backwards sort of way translates into a positive for the market."
TheStreet
