US stocks down as stimulus talks stall, second wave creeps in

Hope is fading that the White House and Congress will agree on an aid package as jobless claims and COVID cases rise.

Wall Street's main indexes took a tumble at the opening in New York on Thursday as hopes for Congress passing a stimulus package wane [File: Eduardo Munoz/Reuters]

Wall Street’s main stock indexes opened on a down note on Thursday, as the White House, Republicans and Democrats remain deadlocked over a new stimulus package. An unexpected rise in weekly jobless claims and surging coronavirus cases in Europe added to the pessimism.

Minutes into the New York trading session, the Dow Jones Industrial Average was down more than 256 points or 0.83 percent at 28,272.99.

The S&P 500 – a gauge for the health of US retirement and college savings reports – was down more than 1 percent while the tech-heavy Nasdaq Composite index was down 1.24 percent.

Treasury Secretary Steven Mnuchin said on Thursday that the White House would stay the course on stimulus talks despite differences with Democrats over funding targets for COVID-19 testing.

“That issue is getting overblown,” Mnuchin told business news network CNBC. “We’ve agreed to $178bn overall for health. It’s an extraordinary amount of money. We’d agreed with the Democrats with $75bn going to testing, contact tracing.”

“When I speak to Pelosi today, I’m going to tell her that we’re not going to let the testing issue stand in the way,” he added. “We’ll fundamentally agree with their testing language subject to some minor issues.”

Calls for a new round of stimulus are growing as the labour market recovery cools.

Initial claims or state unemployment benefits spiked for the week ending October 10, totalling a seasonally adjusted 898,000 compared with 845,000 in the previous week, the Labor Department reported on Thursday.

Wall Street has rallied in recent weeks, as investors clung to hopes that Democrats and Republicans could overcome their partisan differences and throw a new financial lifeline to struggling US businesses and households.

While the S&P 500 and Nasdaq earlier this week came within 2 percent of their record closing highs on September 2, investors are feeling jittery in a season of growing election, pandemic and fiscal uncertainty.

Residents of Meridian Heights apartments in Northwest Washington display a painted bedsheet protesting for the cancellation of rent due to the loss of jobs during the coronavirus pandemic in Washington, DC, United States [File: Sarah Silbiger/Reuters]

President Donald Trump and his Democratic opponent Joe Biden will hold two duelling prime-time town halls on Thursday instead of their second debate. Trump declined to participate in a virtual presidential debate.

The November 3 election is 20 days away. As a politics-as-usual attitude reigns in Washington, millions of American families are feeling the economic squeeze and struggling to make ends meet.

With jobs in short supply, COVID-19 cases surging and no end in sight to pandemic restrictions, Americans need aid to stay afloat.

Investors continue to focus on quarterly earnings of corporate America.

Shares of Morgan Stanley were up 0.23 percent after reporting earnings and revenues that bettered analysts’ estimates.

Shares of Walgreens Boots Alliance Inc were up 5.3 percent after the chemist chain giant reported better-than-expected earnings and said it expects profits to grow in single digits next year.

Shares of drug developer Vertex Pharmaceuticals Inc tumbled 15.49 percent after it discontinued its trial of a protein deficiency disorder treatment.

And shares of United Airlines tumbled 4.56 percent after reporting on Wednesday that its third-quarter revenues nosedived 78 percent.

Source: Al Jazeera

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