Traders work on the floor of the NYSE in New York.
Republican and Democratic leaders said Monday that Congress is trying to extend government funding for an additional week to try and strike a deal on new Covid-19 aid. The news came after a bipartisan group of senators unveiled a $908 billion stimulus proposal last week.
“News out of DC that fiscal stimulus talks have resumed is also a positive development (though until a deal actually passes the President’s desk, this might be all hat, no cattle),” wrote Willie Delwiche, investment strategist at Baird. “These headlines come at a critical time as we remain in a challenging time from both a health and economic perspective.”
Calls for a new aid bill being pushed through before year-end have grown recently as U.S. employment growth continues to slow down and the number of Covid-19 cases keeps rising.
More than 14.8 million coronavirus cases have been confirmed in the U.S., according to data from Johns Hopkins University. The country’s daily infection rate, as a seven-day average, is also at an all-time high.
This latest spike in Covid-19 cases has led several states and cities to reimpose stricter social-distancing measures. New York Gov. Andrew Cuomo said Monday that New York City could lose indoor dining next week, adding that more severe restrictions would be imposed if hospitals reach a critical point.
“You can’t overwhelm the hospital system,” Cuomo said. “Overwhelming the hospital system means people die on a gurney in a hallway.”
The increase in Covid infections, coupled with the uncertainty around additional fiscal aid, knocked the Dow and S&P 500 off record levels on Monday. The Dow slid nearly 150 points, or 0.5%. The S&P 500 pulled back by 0.2%. However, the Nasdaq Composite rose 0.5% to a fresh record as traders sold value stocks in favor of high-flying growth names.
The iShares Russell 1000 Value ETF (IWD) dipped 0.6%. Its growth counterpart, the iShares Russell 1000 Growth ETF (IWF) advanced 0.4%.