Stocks fall as stimulus hopes fade, banks slump
Stocks dropped after Treasury Secretary Steven Mnuchin downplayed the chances of striking a stimulus deal before the election.
Traders also parsed earnings from big banks, with Wells Fargo & Co. tumbling 6% after posting a profit slump and warning that net interest income could "get a little bit softer" in 2021. Bank of America Corp. slid amid an increase in trading revenue that was just a fraction of its competitors' gains, while Goldman Sachs Group Inc. outperformed after earnings per share jumped to a record that was almost twice as high as analysts predicted. Energy stocks joined a rally in oil, with Concho Resources Inc. soaring 10% on a news report that ConocoPhillips is in talks to acquire the company.
Mnuchin said at a conference that getting a stimulus agreement "before the election and executing on that would be difficult." His remarks came after another in a long series of calls with House Speaker Nancy Pelosi, D-Calif., that have failed to seal a deal. While he hoped for bipartisan support for Senate Majority Leader Mitch McConnell's, R-Ky., latest idea -- a vote on a narrow bill next week to help small businesses -- Democratic leaders have no appetite for piecemeal measures now.
"This has been an ongoing drama," said Paul Nolte, portfolio manager at Kingsview Investment Management. "They're getting close, they're not getting close, we're still talking, we're not talking. The latest twist I heard is nothing is going to get done until the election. That's why I think you're getting the market selling off a little bit."
Meanwhile, the Joe Biden campaign on Wednesday denied a New York Post report that said the former vice president met with a senior official from a Ukrainian energy firm that was at the center of a controversy over the dismissal of a prosecutor investigating the company.
These are some of the main moves in markets:
Stocks
- The S&P 500 dipped 0.7% as of 4 p.m. EDT.
- The Stoxx Europe 600 Index fell 0.1%.
- The MSCI Asia Pacific Index decreased 0.1%.
Currencies
- The Bloomberg Dollar Spot Index dipped 0.2%.
- The euro advanced 0.1% to $1.1753.
- The Japanese yen appreciated 0.4% to 105.08 per dollar.
Bonds
- The yield on 10-year Treasurys fell one basis point to 0.72%.
- Germany's 10-year yield dipped two basis points to -0.58%.
- Britain's 10-year yield decreased two basis points to 0.22%.
Commodities
- The Bloomberg Commodity Index advanced 0.6%.
- West Texas Intermediate crude rose 2.1% to $41.03 a barrel.
- Gold added 0.6% to $1,903.40 an ounce.
