U.S. Stocks Come Under Pressure On Mnuchin Comments About Stimulus

After showing a lack of direction earlier in the session, stocks have come under pressure in recent trading on Wednesday. The major averages have pulled back firmly into negative territory after bouncing back and forth across the unchanged line for much of the day.

Currently, the Dow is down 142.86 points or 0.5 percent at 28,536.95, the Nasdaq is down 96.99 points or 0.8 percent at 11,766.91 and the S&P 500 is down 21.16 points or 0.6 percent at 3,490.77.

The weakness that has emerged on Wall Street comes after Treasury Secretary Steven Mnuchin said getting something done on a new stimulus bill before the election “would be difficult.”

“We continue to make progress on certain issues, but on certain issues we continue to be far apart,” Mnuchin said about negotiations with House Speaker Nancy Pelosi in remarks to the Milken Institute Global Conference.

Ahead of Mnuchin’s remarks, Pelosi’s deputy chief of staff Drew Hammill said the Speaker and Mnuchin had a “productive” phone call earlier this morning.

“One major area of disagreement continues to be that the White House lacks an understanding of the need for a national strategic testing plan,” Hammill said on Twitter.

He added, “The Speaker believes we must reopen our economy & schools safely & soon, & scientists agree we must have a strategic testing plan.”

Hammill noted Pelsoi and Mnuchin would speak again on Thursday, although the Treasury Secretary’s comments have partly offset optimism the negotiations will bear fruit.

The choppy trading seen earlier in the day came as traders digested a mixed batch of earnings news ahead of the release of a flood of corporate results in the comings days.

Shares of Bank of America (BAC) have come under pressure after the financial giant reported third quarter earnings that beat analyst estimates but on weaker than expected revenues.

Banking giant Wells Fargo (WFC) has also shown a notable move to the downside after reporting weaker than expected third quarter earnings, although its revenues came in above estimates.

On the other hand, shares of Goldman Sachs (GS) are seeing modest strength after the investment bank reported third quarter results that blew past analyst estimates.

U.S. Bancorp (USB) has also moved higher after the bank holding company reported third quarter results that exceeded analyst estimates on both the top and bottom lines.

Sector News

Retail stocks have come under pressure over the course of the session, dragging the Dow Jones U.S. Retail Index down by 1.4 percent. The index is pulling back after reaching a record intraday high during trading on Tuesday.

Considerable weakness is also visible among telecom stocks, as reflected by the 1.3 percent drop by the NYSE Arca North American Telecom Index.

Commercial real estate and software stocks have also moved to the downside, while energy stocks continue to see significant strength amid an increase by the price of crude oil. Crude for November delivery is climbing $0.63 to $40.83 a barrel.

Reflecting the strength in the sector, the Philadelphia Oil Service Index has surged up by 3.7 percent, while the NYSE Arca Natural Gas Index is up by 2.3 percent and the NYSE Arca Oil Index is up by 1.9 percent.

Airline stocks also continue to see notable strength on the day, with the NYSE Arca Airline Index climbing by 1.7 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while China’s Shanghai Composite Index fell by 0.6 percent.

The major European markets also finished the day mixed. While the German DAX Index crept up by 0.1 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.’s FTSE 100 Index slid by 0.6 percent.

In the bond market, treasuries are seeing modest strength after ending the previous session notably higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.5 basis points at 0.712 percent.

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