U.S. Stocks Come Under Pressure After Seeing Modest Strength In Early Trading
Stocks have come under pressure over the course of morning trading on Thursday, with the major averages pulling back firmly into negative territory after moving modestly higher early in the session.
The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 155.33 points or 0.6 percent at 28,055.49, the Nasdaq is down 106.2 points or 0.9 percent at 11,378.68 and the S&P 500 is down 19.59 points or 0.6 percent at 3,415.97.
The weakness that has emerged on Wall Street partly reflects uncertainty about a new stimulus bill, as traders wait for more concrete signs of progress on an agreement.
House Speaker Nancy Pelosi’s deputy chief of staff Drew Hammill revealed the Democratic leader spoke with Treasury Secretary Steven Mnuchin again on Wednesday, saying the conversation brought the two sides closer to being able to put pen to paper to write legislation.
“With the exchange of legislative language, we are better prepared to reach compromise on several priorities,” Hammill said in a post on Twitter.
He added, “Differences continue to be narrowed on health priorities, including language providing a national strategic testing and contract tracing plan, but more work needs to be done to ensure that schools are the safest places in America for children to learn.”
Hammill said Pelosi and Mnuchin plan to speak again later today, although traders may want to see less talk and more action.
A tweet from President Donald Trump has also led to continued uncertainty about whether an agreement will ultimately be reached.
“Just don’t see any way Nancy Pelosi and Cryin’ Chuck Schumer will be willing to do what is right for our great American workers, or our wonderful USA itself, on Stimulus,” Trump tweeted.
“Their primary focus is BAILING OUT poorly run (and high crime) Democrat cities and states,” he added. “Should take care of our people. It wasn’t their fault that the Plague came in from China!”
Meanwhile, trader have largely shrugged off a report from the Labor Department showing initial jobless claims came in below economist estimates in the week ended October 17th.
The National Association of Realtors also released a report showing a much bigger than expected spike in U.S. existing home sales in the month of September.
Gold stocks have moved sharply lower in morning trading, dragging the NYSE Arca Gold Bugs Index down by 3.2 percent.
The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, with gold for December delivery plunging $30.90 to $1,898.60 an ounce.
Significant weakness has also emerged among software stocks, as reflected by the 1.6 percent drop by the Dow Jones U.S. Software Index.
Housing and retail stocks have also shown notable moves to the downside, while airline stocks are seeing considerable strength on the day.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slid by 0.7 percent, while China’s Shanghai Composite Index fell by 0.4 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index is down by 0.7 percent, the French CAC 40 Index is down by 0.5 percent, and the U.K.’s FTSE 100 Index is down by 0.2 percent.
In the bond market, treasuries have shown a lack of direction over the course of morning. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 0.823 percent.
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