Wednesday, 25 Nov 2020

S&P edges higher in choppy session as stimulus talks drag on

(Reuters) – The S&P 500 advanced slightly on Wednesday in volatile trading as investors tracked Washington negotiations for a fresh coronavirus stimulus package and appeared skeptical a deal would be reached before the Nov. 3 U.S. elections.

FILE PHOTO: The front facade of the New York Stock Exchange (NYSE) is seen in New York City, New York, U.S., June 26, 2020. REUTERS/Brendan McDermid

U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were scheduled to talk at 230 PM EDT (1830 GMT) about details of a relief package that Democrats want be in the range of $2.2 trillion.

Pelosi, who over the weekend had set a Tuesday deadline for an agreement, said she hoped to resolve the “appropriations piece” of the aid bill Wednesday. However, Senate Majority Leader Mitch McConnell does not want to bring a large coronavirus aid bill to the Senate floor before the election, a senior Republican aide said.

“The market’s maybe finally realizing it’s not happening or if it does happen its going to happen after the election,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

But investors were taking that prospect in their stride as a pre-election agreement has been in question for some time.

“We’re not seeing a lot of panic or fear. Apathy is a good description,” said O’Rourke.

At 2:25 p.m. ET, the Dow Jones Industrial Average rose 0.13 points, or 0%, to 28,308.92, the S&P 500 gained 5.71 points, or 0.17%, to 3,448.83 and the Nasdaq Composite added 8.02 points, or 0.07%, to 11,524.51.

Seven of the 11 major S&P sectors were lower, with Energy leading the percentage decliners.

Instead of plowing money into the market broadly, O’ Rourke said investors picked stocks as they looked at results coming out of the third-quarter financial reporting season.

Of the major industry sectors communications services was the biggest gainer, up nearly 2%, after Snapchat messaging app owner Snap Inc beat user growth and revenue forecasts, as more people signed up to chat with friends and family during the COVID-19 pandemic.

The results boosted the shares of social media companies Facebook Inc, up around 5%, and Twitter Inc, up around 8%, helped lift the communications services sector along with a 2.7% rise for Google-parent Alphabet Inc. Smaller social media firm Pinterest Inc was up 8%.

Dampening the mood, Netflix Inc was down more than 6% after it kicked off earnings from the Big Tech club. The video streaming service missed expectations for subscriber growth as competition increased and live sports returned to television.

Of the 84 S&P 500 firms that have reported third-quarter results, 85.7% have topped expectations for earnings, according to IBES Refinitiv data.

After touching a one month high early, Wall Street’s fear gauge edged lower in afternoon trading.

Investors were also worried ahead of the elections.

Republican President Donald Trump and Democratic challenger Joe Biden will face off in their second and final debate on Thursday night, with Biden leading the race, according to national polls.

Indexes changed little after the U.S. central bank’s “Beige Book” report, a snapshot of the economy gleaned from discussions with business contacts, showed that employment increased in almost all districts, though growth remained slow.

Electric-car maker Tesla Inc rose 1.4% as investors geared up for its quarterly report after the closing bell.

Declining issues outnumbered advancing ones on the NYSE by a 1.42-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favored decliners.

The S&P 500 posted 19 new 52-week highs and no new lows; the Nasdaq Composite recorded 53 new highs and 28 new lows.

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