US stocks retreat at close as stimulus hopes fade

Wall Street ended lower on Monday (Oct. 19), erasing early gains amid signs of rising coronavirus infections and dwindling hope of a stimulus deal for the US economy.

The Dow Jones lost 1.4 percent to finish at 28,195.

The S&P 500 and the Nasdaq each fell 1.6 percent to 3,426 and 11,478, respectively.

A National Association of Home Builders survey released on Monday showed record optimism in the industry but investors were nonetheless focused on the dwindling time Congress and White House have to agree on a spending package to boost the coronavirus-ravaged US economy.

House Speaker Nancy Pelosi said on Sunday there were less than 48 hours left to work out a deal that could be approved before the November 3 election.

"As time goes on, it's less and less likely that we get the stimulus package before the election," said Sam Stovall, chief investment strategist at CFRA Research.

"Why would the Democrats want to give the Republicans something to brag about?"

President Donald Trump, who is trailing far behind his challenger Joe Biden in the polls, has proposed a US$1.8 trillion package and indicated he would go higher, while Democrats in the House of Representatives have approved a US$2.2 trillion measure.

However, Senate Majority Leader Mitch McConnell has repeatedly signaled he would not support a massive package.

Pelosi and Mnuchin spoke again on Monday and "continued to narrow their differences," Pelosi spokesman Drew Hammill said after markets closed.

"The Speaker continues to hope that, by the end of the day on Tuesday, we will have clarity on whether we will be able to pass a bill before the election," he tweeted.

Oil giant ConocoPhillips fell 3.2 percent after announcing before the open it would acquire shale oil rival Concho Resources in a transaction valued at US$9.7 billion. Concho's stock lost 2.8 percent.

IBM closed 0.3 percent lower, and after the close reported its third straight quarterly loss of revenues.

(Source: AFP)