(Bloomberg) — Stocks fell on speculation that a rally to a six-week high has outpaced prospects for a quick end to the stalemate over economic stimulus. Treasuries and the dollar climbed.
Banks led losses in the S&P 500 after JPMorgan Chase & Co. said its surprisingly-good reserve release didn’t reflect a better view of the economy and Citigroup Inc. reported a jump in costs. Tech shares outperformed as Amazon.com Inc. and Apple Inc. hold key events. Delta Air Lines Inc. tumbled as a decision to delay $5 billion in jetliner deliveries signaled weak travel demand. Johnson & Johnson sank as the drugmaker paused its late-stage study of a coronavirus vaccine.
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Prospects for U.S. fiscal stimulus before Election Day dimmed on Tuesday, with House Speaker Nancy Pelosi demanding the Trump administration revamp its latest offer and Senate Republican leader Mitch McConnell pushing a smaller-scale strategy Democrats have repeatedly rejected. McConnell’s proposal to vote next week on just one provision — replenishing funds in the Paycheck Protection Program for small businesses — appeared to stoke opposition even from President Donald Trump, who tweeted “Go big or go home!!”
“It’s been a rollercoaster ride in terms of communication from both sides,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management. “There are still going to be significant pockets of stress in the economy,” and a fiscal package could help bridge the gap until we do get a vaccine, he added.
Meanwhile, Amy Coney Barrett rejected suggestions that she has pre-set views on the constitutionality of the Affordable Care Act, as Senate Democrats began a highly anticipated interrogation aimed at portraying the Supreme Court nominee as a dire threat to health care and abortion rights.
Here are some key events coming up:
Results from Wells Fargo, Bank of America and Goldman Sachs are due Wednesday; Morgan Stanley’s earnings are scheduled for Thursday.U.K. Prime Minister Boris Johnson set a deadline of Thursday to thrash out the outline of a European Union trade deal.European Central Bank President Christine Lagarde leads off the virtual annual meetings of the International Monetary Fund and the World Bank Group. Through Oct. 18.
These are some of the main moves in markets:
The S&P 500 decreased 0.4% as of 1 p.m. New York time.The Stoxx Europe 600 Index sank 0.5%.The MSCI Asia Pacific Index rose 0.1%.
The Bloomberg Dollar Spot Index jumped 0.5%.The euro sank 0.6% to $1.1741.The Japanese yen weakened 0.2% to 105.53 per dollar.
The yield on 10-year Treasuries fell four basis points to 0.73%.Germany’s 10-year yield fell one basis point to -0.56%.Britain’s 10-year yield decreased three basis points to 0.239%.
The Bloomberg Commodity Index fell 0.3%.West Texas Intermediate crude increased 2% to $40.22 a barrel.Gold weakened 1.4% to $1,895.04 an ounce.
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