US stocks flat as Fed’s Powell urges more federal virus aid

Wall Street’s main indexes were hovering near unchanged on Tuesday after Federal Reserve Chairman Jerome Powell warned again that the United States economic recovery could falter without more federal fiscal stimulus from Congress.

The Dow Jones Industrial Average was up 0.12 percent at 28,183.69 in early afternoon trading on Wall Street.

The S&P 500 – a gauge for the health of US retirement and college savings reports – was down 0.10 percent while the tech-heavy Nasdaq Composite Index was down 0.4 percent.

Speaking to the National Association for Business Economics, Powell laid out the case for more fiscal stimulus, arguing:  “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses.”

Powell said that the roughly $3 trillion in coronavirus-relief aid Congress passed in March and April had given “vital support to households”, which combined with the federal lifeline to businesses – “have so far partly forestalled an expected wave of bankruptcies and lessened permanent layoffs”.

But the economy still has a lot of lost ground to make up for.  Roughly half of the 22 million jobs lost in March and April have been recovered. And as Powell noted, while the unemployment rate fell to 7.9 percent last month, a broader measure that better captures the jobs market landscape is running near 11 percent.

“The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” he said.

So far, though, a bipartisan deal on a new round of virus relief aid remains elusive, with the White House and Republicans failing to find common ground with Democrats in Congress.

Meanwhile, Trump arrived back at the White House on Monday evening local time after leaving Walter Reed hospital following several days of treatment for coronavirus.

I will be leaving the great Walter Reed Medical Center today at 6:30 P.M. Feeling really good! Don’t be afraid of Covid. Don’t let it dominate your life. We have developed, under the Trump Administration, some really great drugs & knowledge. I feel better than I did 20 years ago!

— Donald J. Trump (@realDonaldTrump) October 5, 2020

 

“Don’t let it dominate you. Don’t be afraid of it,” Trump said about COVID-19 in a video shared on Twitter.  “We have the greatest country in the world. We’re going back. We’re going back to work.”

With only 28 days until the November presidential election, investors are weighing the possibility of a Democratic sweep and what that could mean for jobs, taxes, consumer confidence and the stock market.

Among the stocks making headlines on Tuesday: Shares of Boeing were down 3 percent in early afternoon trading in New York after the company cut its rolling forecast for airplane demand for the next 20 years by two percent.

Shares of Pfizer were down 0.13 percent despite news that a European health regulator has launched a real-time review of a COVID-19 vaccine candidate that the US drug giant is developing with Germany’s BioNTech.

Shares of Moderna were off 0.14 percent. The drugmaker said its vaccine testing was slightly delayed after it failed to enroll enough African-American, Latino and Native American participants in its trial to determine how well its COVID-19 vaccine works in these populations, Reuters news agency reported.