Dow closes down more than 400 points as stimulus hopes fade

The clock is winding down on Washington to overcome its partisan differences and pass a new coronavirus relief aid package.

Uncertainty reigns on Wall Street as United States officials struggle to pass another round of stimulus measures [File: Lucas Jackson/Reuters]
Uncertainty reigns on Wall Street as United States officials struggle to pass another round of stimulus measures [File: Lucas Jackson/Reuters]

Wall Street’s main stock indexes finished in the red on Monday as Washington failed again to overcome its partisan differences over a new round of virus relief aid- further dashing hopes that a fresh financial lifeline will be thrown to United States businesses and households before the November 3rd elections.

The Dow Jones Industrial Average closed down more than 410 points or 1.44 percent at 28,195.42.

The S&P 500 – a gauge for the health of US retirement and college savings reports – finished down 1.63 percent at 3,426.92 while the tech-heavy Nasdaq Composite index ended Monday down 1.65 percent at 11,478.88

During the weekend, Democratic leader House Speaker Nancy Pelosi said a deal for a new round of virus relief aid would have to be agreed by Tuesday for a package to pass before the US elections.

Despite continuing negotiations, there are still significant differences about the scope of an aid package.

House Democrats are pushing for a $2.2 trillion deal, while the White House floated a $1.8 trillion package to House Democrats earlier this month.

But President Donald Trump has said since last week that he is ready to go higher.

Meanwhile, Republicans in the Senate are set to vote on Tuesday on a stripped-down $500bn stimulus package.

The question mark about a new round of stimulus, combined with the prospects of a contested election and COVID-19 infection spikes in parts of the US all weighed on investor sentiment on Monday.

With slightly more than two weeks to go until Election Day, almost 30 million Americans have cast their ballot already, shattering previous early voting records.

President Donald Trump and his Democratic rival Joe Biden are slated to face-off in their final debate on Thursday.

As for stocks making headlines on Monday: Shares of ConocoPhillips finished the session down 3.1 percent after the company agreed to buy US shale oil producer Concho Resources Inc for $9.7bn.

The takeover would make ConocoPhillips the largest US independent oil producer, pumping 1.5 million barrels per day.

Shares of Concho Resources finished the session down 2.75 percent.

The US shale industry has weathered some extreme challenges this year: a historic drop in prices, massive oversupply, hurricanes and heavy debt.

And Boeing’s shares closed down 0.24 percent after American Airlines said it would start to fly the jet maker’s 737 MAX planes again by the end of 2020 if the Federal Aviation Administration gives the model a thumbs-up.

Source : Al Jazeera

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