Wall Street’s three major averages closed lower on Wednesday after a volatile trading session, as investors worried whether difficult negotiations in Washington would produce a deal for a fresh U.S. coronavirus stimulus package.
White House Chief of Staff Mark Meadows said that while there are a number of differences between the White House and Congressional Democrats, Republican President Donald Trump was “willing to lean into” working on an agreement.
Before starting afternoon talks with Treasury Secretary Steven Mnuchin, U.S. House Speaker Nancy Pelosi said there was still a chance for a deal despite resistance from Senate Republicans, though she acknowledged it might not pass until after the election.
“As long as she keeps dangling the carrot out there that there’s still a chance that something could get done investors continue to remain optimistic,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
“You would rather have more long exposure than have too much cash if an agreement is reached. That’s a big if.”
James said investors were holding out hope a deal could be reached on Thursday. “Everybody’s going to be sitting on pins and needles waiting for the next headline between now and the end of tomorrow’s trading day.”
The Dow Jones Industrial Average fell 97.97 points, or 0.35%, to 28,210.82, the S&P 500 lost 7.56 points, or 0.22%, to 3,435.56 and the Nasdaq Composite dropped 31.80 points, or 0.28%, to 11,484.69.
After the closing bell, Pelosi spokesman Drew Hammill said the day’s session “brings us closer to being able to put pen to paper to write legislation.”
Instead of plowing money into the market broadly, Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut said investors picked stocks as they looked at third-quarter financial results.
Of the 11 major industry sectors nine closed lower with energy leading the percentage decliners. Communications services was the biggest gainer.
Shares in Snapchat messaging app owner Snap Inc finished up 28% after it beat user growth and revenue forecasts, as more people signed up to chat with friends and family during the COVID-19 pandemic.
The news helped boost other social media companies with Facebook Inc, up 4% and Twitter Inc climbing 8% in the communications services index. Smaller social media firm Pinterest Inc also gained close to 9%.
Dampening the mood however was Netflix Inc, which tumbled almost 7% after it kicked off earnings for the market’s high-flyers club. The video streaming service missed expectations for subscriber growth as competition increased and live sports returned to television.
Of the 84 S&P 500 firms that have reported third-quarter results, 85.7% have topped expectations for earnings, according to IBES Refinitiv data.
Investors also have their eyes on the upcoming elections. Trump and Democratic challenger Joe Biden will face off in their second and final debate on Thursday night.
Shares in electric-car maker Tesla Inc rose 4% after the closing bell after it reported quarterly earnings. Tesla beat analysts’ estimates for third-quarter revenue as it made record vehicle deliveries, overcoming disruptions caused by the COVID-19 pandemic.
Declining issues outnumbered advancing ones on the NYSE by a 1.87-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favored decliners.
The S&P 500 posted 19 new 52-week highs and no new lows; the Nasdaq Composite recorded 55 new highs and 36 new lows.
On U.S. exchanges 8.84 billion shares changed hands compared with the 9.14 billion average for the last 20 sessions. Credit: MoneyControl