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US stocks slide as stimulus stalemate continues

Andrew Kelly/Reuters

  • US stocks slipped on Tuesday as a stalemate in fiscal stimulus negotiations continued.
  • Initial results of the third-quarter earnings season kick off also failed to impress investors.
  • JPMorgan and Citigroup reported quarterly results that beat expectations but were met with falling stock prices.
  • A temporary pause in Johnson & Johnson’s COVID-19 vaccine trial and Eli Lilly’s COVID-19 antibody treatment trial spooked investors awaiting successful vaccines and therapeutics to help stifle the pandemic.
  • Watch major indexes update live here.

US stocks slid on Tuesday as a stalemate in fiscal stimulus negotiations continued and third-quarter earnings season kicked off with reports from banks like JPMorgan and Citigroup.

Major indexes also faced pressure as Johnson & Johnson said it would pause its COVID-19 vaccine trial because of an unexpected illness in a participant.

On top of that, Eli Lilly said it would pause its trial of a COVID-19 antibody treatment over safety concerns. The announcements sent shares of both healthcare companies lower and dented near-term hopes for a vaccine or therapeutic.

JPMorgan reported better-than-expected earnings, helped partly by a surge in trading revenue that was buoyed by a rise in global stocks. Citigroup also benefited from a jump in trading revenue, helping it to report earnings that beat analysts’ expectations.

Here’s where US indexes stood at the 4 p.m. ET market close on Tuesday:

  • S&P 500: 3,511.93, down 0.6%
  • Dow Jones industrial average: 28,679.81, down 0.6% (158 points)
  • Nasdaq composite: 11,863.90, down 0.1%

Read more: MORGAN STANLEY: Buy these 44 cheap stocks poised to surge as the economy continues to recover and reopening expands.

Aside from its vaccine hiccup, Johnson & Johnson also reported earnings that beat analysts’ estimates and raised its fiscal 2020 revenue and earnings guidance.

Shares of Disney climbed after it announced it would reorganize its media-and-entertainment business to focus on its streaming ambitions with its Disney Plus service.

The IMF raised its global GDP outlook but said the stock market could face a sharp correction if the COVID-19 pandemic persists for longer than investors expect.

Read more: Goldman Sachs says buy these 35 stocks for big gains right now as they offer double-digit sales growth and explosive margin expansion

Despite the stalemate in fiscal negotiations, a breakthrough could be just around the corner after Mitch McConnell signaled support for passing a stimulus deal prior to the upcoming election. 

Apple slid on Tuesday as it announced its new iPhone 12 lineup, representing the first major redesign to its flagship product in over 3 years. 

Gold fell as much as 1.9%, to $1,886.54 per ounce.

Oil traded higher. West Texas Intermediate crude jumped as much as 2.8%, to $40.53 per barrel. Brent crude, oil’s international benchmark, rose 2.3%, to $42.68 per barrel, at intraday highs.

Read more: Morgan Stanley lays out its 5 favorite trades for investors looking to dominate a looming V-shaped recovery, even if a stimulus deal takes until 2021

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Dow gains 251 points as tech giants rally and stimulus hopes persist

Andrew Burton/Getty Images

  • US stocks rose on Monday as Democrats and Republicans inched closer to a stimulus compromise.
  • Mega-cap companies including Apple and Amazon led indexes higher as investors rushed to the growth favorites.
  • President Trump urged Republicans to speed up Amy Coney Barrett’s confirmation to the Supreme Court so that they can pass a new stimulus bill before Election Day.
  • Investors also prepared for earnings season. Citigroup and JPMorgan are set to kick off reporting on Tuesday.
  • Oil futures sank as operations temporarily halted by Hurricane Delta resumed. West Texas Intermediate crude fell as much as 3.8%, to $39.04 per barrel.
  • Watch major indexes update live here.

US equities extended their rally into a new week as investors pushed tech giants higher.

Apple surged ahead of a Tuesday event widely expected to unveil the next generation of iPhones. Amazon climbed as it kicked off its Prime Day sale event. Other mega-caps including Alphabet and Microsoft also drove indexes’ gains.

Investors hoping for fresh government aid remained hopeful on the prospects of a near-term bill. The Trump administration raised its proposal to $1.8 trillion from $1.6 trillion on Friday, closing the gap with House Democrats’ $2.2 trillion bill.

The measure includes another round of stimulus checks and funding for the Paycheck Protection Program, but falls short of Democrats’ allocations for expanded unemployment benefits and state and local governments. 

Here’s where US indexes stood at the 4 p.m. ET market close on Monday:

  • S&P 500: 3,534.22, up 1.6%
  • Dow Jones industrial average: 28,837.52, up 0.9% (251 points)
  • Nasdaq composite: 11,876.26, up 2.6%

Read more: GOLDMAN SACHS: Buy these 15 stocks set to deliver the strongest possible profit growth and subsequent returns through year-end

Still, House Speaker Nancy Pelosi described the administration’s new offer as “one step forward, two steps back.” Pelosi and Treasury Secretary Steven Mnuchin are expected to continue negotiations throughout the week, though the odds of passing a bill before the presidential election are dwindling.

Bringing the measure to a vote in the Senate would also prove difficult, as Republican lawmakers have shifted their focus to confirming Judge Amy Coney Barrett to the Supreme Court. Four days of congressional confirmation hearings begin Monday morning.

President Donald Trump urged Republicans to speed up Barrett’s confirmation process so they can pass new fiscal relief earlier.

“Personally, I would pull back, approve, and go for STIMULUS for the people!!” he said in a Monday morning tweet. To be sure, Senate Republicans have balked at the White House’s latest offer.

Bank earnings are set to drive the market’s trajectory through the rest of the week. Citigroup and JPMorgan kick off third-quarter reporting on Tuesday, followed by Goldman Sachs and Bank of America on Wednesday.

Read more: A $2 billion fund manager says market volatility is here to stay for the long-term. He breaks down his best recommendations for the new normal – including 4 of his favorite stocks.

“The stimulus stalemate still looms large, though it failed to derail the market last week. And with high expectations for big bank earnings kicking off the season, we could get a clearer picture into just how far we’ve come in terms of economic recovery,” said Chris Larkin, the managing director of trading and investment product at E-Trade.

Communications services and consumer discretionary stocks followed tech’s lead in the market upswing. Materials and energy stocks underperformed.

Monday’s uptick followed the market’s best week since August. Renewed stimulus hopes brought investors back to stocks, and economic indicators including weekly jobless claims showed continued – albeit slowing – improvement.

Read more: ‘The largest financial crisis in history’: A 47-year market vet says the COVID-19 crash was merely a ‘fake-out sell-off’ – and warns of an 80% stock plunge fraught with bank failures and bankruptcies

Twilio shares leaped after the firm agreed to buy the data platform Segment for $3.2 billion. The acquisition is expected to close before the end of the year.

Department-store chain Dillard spiked higher after Berkshire Hathaway investment manager Ted Weschler unveiled a 6% stake in the company.

Spot gold fell as much as 0.6%, to $1,918.44 per ounce, before paring losses. The US dollar gained slightly against a basket of global peers.

Oil traded lower as operations temporarily constrained by Hurricane Delta resumed. West Texas Intermediate crude fell as much as 3.8%, to $39.04 per barrel. Brent crude, oil’s international standard, sank 3.5%, to $41.36 per barrel, at intraday lows.

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Business

Dow rises 161 points as economic-stimulus talks show progress

Xinhua/Wang Ying/ Getty Images

  • US stocks moved higher Friday on continued hope that negotiations on fiscal stimulus will lead to a deal before the election.
  • House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued negotiations, trying to find middle ground on the size and scope of a new deal.
  • President Donald Trump this week reversed his stance on a stimulus deal and said he now favors a large deal.
  • “Covid Relief Negotiations are moving along,” Trump tweeted on Friday. “Go Big!”
  • Watch major indexes update live here.

US stocks moved higher on Friday as negotiations continued on another round of fiscal stimulus to combat the economic decline caused by the COVID-19 pandemic.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin had been trying to make a deal before the November election, but President Donald Trump said earlier this week that negotiations were over.

Fast-forward to Friday, and the talks are back on.

“Covid Relief Negotiations are moving along,” Trump tweeted on Friday. “Go Big!”

Here’s where US indexes stood at the 4 p.m. ET market close on Friday:

  • S&P 500: 3,477.13, up 0.9%
  • Dow Jones industrial average: 28,586.90, up 0.6% (161 points)
  • Nasdaq composite: 11,579.94, up 1.4%

Read more: Fund manager Brandon Nelson is tripling his benchmark in 2020 with ‘less-discovered’ companies that become big winners. Here are 3 themes and 9 stocks he’s betting on.

Senate Majority Leader Mitch McConnell said on Friday morning that a stimulus deal before the election was unlikely. But shortly after McConnell spoke, the White House economic advisor Larry Kudlow said Trump had raised his offer to a $1.8 trillion deal from $1.6 trillion. House Democrats recently passed a $2.2 trillion bill.

“I would like to see a bigger stimulus package, frankly, than either the Democrats or the Republicans are offering,” Trump said in a radio interview with Rush Limbaugh on Friday.

“I’d like to see a bigger package,” he said, adding, “I’d like to see money going to people.”

A deal would likely include another round of stimulus checks for Americans, aid for the airline industry, and an extension of the Paycheck Protection Program, among other things.

JPMorgan said on Friday that a deal appeared to be inching closer to reality after Trump’s reversal from pulling out of negotiations earlier this week.

The takeaway from the stimulus headlines “should be seen mostly incremental progress that keeps a stimulus deal hope alive, but ultimately still pretty unlikely before elections,” JPMorgan said.

Read more: Buy these 7 stocks poised to profit from the boom in packaged-food sales as COVID-19 prompts more Americans to cook at home, Stifel says.

Shares of Xilinx soared as much as 17% on Friday after reports that AMD was in advanced talks to acquire it. Gains in semiconductor stocks broadly helped boost technology names.

The economic recovery in the UK showed signs of slowing: It reported August GDP growth of 2.1%, well below the expectations of 4.6%.

Goldman Sachs upgraded General Electric to “buy” and set a $10 price target, citing the potential for a COVID-19 vaccine to boost its aviation business.

Shaquille O’Neal joined the SPAC craze, announcing that he would join forces with three Disney executives and Martin Luther King III to raise $250 million to help fund a deal targeting the tech and media space.

Gold rose as much as 1.9%, to $1,929.66 per ounce.

Oil traded lower. West Texas Intermediate crude fell as much as 2%, to $40.38 per barrel. Brent crude, oil’s international benchmark, slid 1.7%, to $42.61 per barrel, at intraday lows.

Read more: Self-taught market wizard Richard Dennis took a $1,600 loan and turned it into an estimated $200 million. He shares the 13 trading rules that turned his performance parabolic.

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