Stocks moved mostly lower over the course of the trading day on Wednesday, extending the pullback seen in the previous session. The major averages slid firmly into negative territory after showing a lack of direction in early trading.
The major averages ended the session off their worst levels of the day but still firmly in the red. The Dow dropped 165.81 points or 0.6 percent to 28,514.00, the Nasdaq slid 95.17 points or 0.8 percent to 11,768.73 and the S&P 500 fell 23.26 points or 0.7 percent to 3,488.67.
The weakness that emerged on Wall Street came following comments from Treasury Secretary Steven Mnuchin offsetting recent optimism about a new stimulus bill.
In remarks to the Milken Institute Global Conference, 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.
Senate Majority Leader Mitch McConnell has also cast doubts about whether a bill can pass before the election and recently announced plans to vote on a more limited relief package.
Ahead of Mnuchin’s remarks, Pelosi’s deputy chief of staff Drew Hammill said the Speaker and the Treasury Secretary 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 Pelosi and Mnuchin would speak again on Thursday, although the Treasury Secretary’s comments have partly offset optimism the negotiations will bear fruit.
A negative reaction to the latest batch of earnings news also weighed on Wall Street, with shares of Bank of America (BAC) falling sharply after the financial giant reported third quarter earnings that beat analyst estimates but on weaker than expected revenues.
Banking giant Wells Fargo (WFC) also posted a steep loss after reporting weaker than expected third quarter earnings, although its revenues came in above estimates.
Shares of UnitedHealth (UNH) also came under pressure even though the health insurer reported better than expected third quarter results and raised its full-year guidance.
Retail stocks came under pressure over the course of the session, with the Dow Jones U.S. Retail Index falling by 1.6 percent after reaching a record intraday high during the previous session.
Considerable weakness also emerged among banking stocks, as reflected by the 1.8 percent drop by the KBW Bank Index. The index continued to give back ground after reaching a nearly four-month closing high on Monday.
Telecom stocks also showed a significantly move to the downside on the day, dragging the NYSE Arca North American Telecom Index down by 1.5 percent.
Biotechnology and commercial real estate stocks also moved notably lower, while strength remained visible among oil service, gold, and airline stocks.
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 pulled back near the unchanged line going into the close of trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 0.722 percent after hitting a low of 0.709 percent.
The latest earnings news may attract attention on Thursday, with Alcoa (AA), Sleep Number (SNBR) and United Airlines (UAL) among the companies releasing their quarterly results after the close of today’s trading.
Charles Schwab (SCHW), Morgan Stanley (MS) and Walgreens Boots Alliance (WBA) are also among the companies due to report their results before the start of trading on Thursday.
Trading on Thursday may also be impacted by reaction to reports on weekly jobless claims, regional manufacturing activity and import and export prices.
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