Dow falls 200 factors on stimulus issues, Intel leads know-how decrease
US stocks fell Friday as investors weighed the potential for additional fiscal stimulus and Intel stocks led the broader tech sector down.
The Dow Jones Industrial Average fell 200 points, or 0.7%. The S&P 500 retreated 0.3% and the Nasdaq Composite retreated 0.4%.
Friday’s decline put the Dow and S&P 500 on track for a three-week winning streak, and the Nasdaq was on track to its first weekly loss in five weeks. All three market benchmarks have fallen by at least 1% for weeks.
“We have offered compromises and the speaker has not yet been settled on a number of subjects,” said Treasury Secretary Steven Mnuchin. “If she wants to compromise, there will be a deal. But we’ve made great strides in many areas, but there are still some important areas that we are working on.”
President Donald Trump also said Friday that he does not want the aid agreement to save democratic states. The major averages fell to their session lows as a result of these comments.
Traders have been keeping an eye on Washington for the past few weeks as they assessed the prospect for enforcement of new coronavirus remedies. Several market experts and economists, including Federal Reserve Chairman Jerome Powell, believe it is imperative that lawmakers reach an agreement on another stimulus package.
“The government is still trying to put together another economic aid package,” said Jim Paulsen, chief investment strategist at The Leuthold Group. “Despite the July end of unemployment benefits under the CARES bill, US economic dynamism is remarkably healthy two and a half months later.”
Intel shares fell 11.3% after the chipmaker released mixed quarterly results. The company’s earnings were in line with analysts ‘expectations, but data center business revenue fell short of analysts’ estimates.
These losses have hurt other technology-related names. Apple was down 1.2%. Amazon fell 0.7%. Western Digital and Micron Technology both fell more than 3%.
It’s been a tough week for the tech sector, down more than 2% as fears a Democratic sweep on November 3rd could put pressure on the soaring stock group.
“We see the greatest uncertainty and the greatest risk for in a democratic sweep [the] Large-cap internet sector, “Bank of America analysts said in a note. In particular, analysts believe a” blue wave “could lead to higher taxes and tighter regulation for tech companies.
Banks were a ray of hope in Friday’s downbeat session as a surge in government bond yields gave the group a boost. Citigroup and JPMorgan Chase gained 0.5% and 0.7% respectively. Bank of America was up 0.2%.
– CNBC’s Yun Li contributed to the coverage.
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