The clock is ticking for Washington to pass a new fiscal aid package before November 3 elections.
Wall Street’s main stock indexes edged higher on Thursday as investors parse everything from earnings and a snapshot of the United States labour market to the implications of surging virus cases amid the continuing Washington deadlock over a new round of stimulus.
The Dow Jones Industrial Average was hovering near the flatline at midmorning trading in New York – up 0.06 percent at 28,232.82.
The S&P 500 – a gauge for the health of US retirement and college savings reports – was up 0.19 percent, while the tech-heavy Nasdaq Composite Index was up 0.15 percent.
The number of Americans filing for state unemployment benefits last week dropped more than expected to 787,000 – its lowest level of the pandemic. But it is still nearly four times higher than pre-pandemic levels.
Wall Street has had a volatile several weeks as investors anxiously wait for lawmakers in Washington to pass another mega-stimulus package that could help prop up the economy and keep the recovery on track.
The jobs recovery has cooled, consumer sentiment is faltering and tech stocks are taking a breather after driving Wall Street’s rebound from March lows.
Just don’t see any way Nancy Pelosi and Cryin’ Chuck Schumer will be willing to do what is right for our great American workers, or our wonderful USA itself, on Stimulus. Their primary focus is BAILING OUT poorly run (and high crime) Democrat cities and states….
— Donald J. Trump (@realDonaldTrump) October 21, 2020
Despite the urgent need for cash to be injected into the economy, Republicans, Democrats and the White House fail to see eye to eye.
President Donald Trump has agreed to sign a $1.8 trillion package but the Democrats are holding out for the whole $2.2 trillion they have asked for. The 48-hour deadline set by Democrat Speaker of the House of Representatives Nancy Pelosi on Sunday keeps getting moved back.
While talks between Pelosi and the White House’s Treasury Secretary Steven Mnuchin are continuing, there is growing concern that division will continue with 12 days before the most heated election in recent memory.
On Wednesday, Trump accused Democrats of being unwilling “to do what is right for our great American workers” and craft an acceptable compromise for a coronavirus aid bill.
Trump and his Democratic challenger Joe Biden will take to the stage on Thursday night for the second and last presidential debate before election day on November 3. Biden continues to lead in several key battleground states.
Meanwhile, the number of coronavirus cases continues to intensify around the world, with Europe setting new records. Governments desperately want to avoid another round of debilitating lockdowns, but as cases spike they may not have much of a choice.
A second coronavirus wave in the US and another round of lockdowns would likely spawn more layoffs, mass evictions and longer food lines.
Among stocks making headlines on Thursday:
Shares of Tesla were up 1.6 percent in early morning trading after the electric carmaker smashed its earnings target, reporting a fifth consecutive quarterly profit and record revenue of $8.8bn.
Coca-Cola shares were up 1.86 percent after it beat quarterly earnings expectations.
Shares of Chipotle Mexican Grill tumbled 6.08 percent after posting a slump in quarterly earnings, dragged down by higher beef prices, delivery costs and coronavirus-related expenses.
Shares of American Airlines were down 0.78 percent, while Southwest Airlines shares were up 3.5 percent. Both carriers reported steep losses for the third quarter but said they would burn less cash in the coming months.