U.S. stocks drop with spending-aid deal elusive
U.S. stocks fell to the lowest in almost two weeks as Congress remained apart on a fresh government spending deal, denting hopes for a breakthrough before the election. Treasurys slipped with the dollar.
The S&P 500 Index fell more than 1.5% as opposition to a sizable aid package hardened in the Republican-controlled Senate and the House Speaker told her caucus negotiators are still trying to reach a deal. Data showed key parts of the American economy are slowing two weeks ahead of the vote, while Federal Reserve officials warn the growth will slow without additional federal spending.
Futures had advanced overnight on signs of progress toward a deal and the latest data from China showing its economy continues to rebound. The 10-year Treasury yield rose above 0.76% and the dollar weakened versus major peers.
"As the hope for stimulus before the election fades, the market kind of fades with it," said Christopher Grisanti, chief equity strategist at MAI Capital Management. "The market was pricing in some kind of stimulus and without it there's disappointment."
In Europe, stock slumped while the pound jumped by the most since August as British officials signaled they were ready to water down controversial lawbreaking Brexit legislation, a move which could reopen talks with the European Union over future trading relationships.
Elsewhere, oil dropped before an OPEC+ meeting to assess the state of the market as demand comes under pressure from the threat of new virus restrictions.
These are some of the main moves in markets:
Stocks
- The S&P 500 Index slipped 1.6% at 4 p.m. EDT.
- The Nasdaq 100 lost 1.8% while the Dow Jones industrial average fell 1.4%.
- The Stoxx Europe 600 Index lost 0.3%.
- The MSCI Asia Pacific Index rose 0.8%.
- The MSCI Emerging Market Index rose 0.5%.
Currencies
- The Bloomberg Dollar Spot Index decreased 0.1%.
- The euro climbed 0.4% to $1.1769.
- The British pound increased 0.2% to $1.2942.
- The onshore yuan strengthened 0.2% to 6.685 per dollar.
- The Japanese yen was flat at 105.42 per dollar.
Bonds
- The yield on 10-year Treasurys climbed one basis point to 0.76%.
- The yield on two-year Treasurys climbed one basis point to 0.145%.
- Germany's 10-year yield gained one basis point to -0.61%.
- Japan's 10-year yield jumped less than one basis point to 0.026%.
- Britain's 10-year yield climbed two basis points to 0.201%.
Commodities
- West Texas Intermediate crude fell 0.7% to $40.59 a barrel.
- Brent crude dropped 1.1% to $42.43 a barrel.
- Gold futures slipped 0.1% to $1,904.20 an ounce.
