Major indexes on Wall Street went down in the October 21 session as representatives of both Democrats and Republicans have yet to find common ground on the large-scale fiscal stimulus bill dealing with the Covid-19 pandemic.
Closing Wednesday’s session, the Dow Jones industrial average slumped 97.97 points (or 0.4%) to 28,210.82 points after rising more than 100 points at the start of the session. The S&P 500 fell 0.2 percent to 3,435.56 and the Nasdaq Composite index lost 0.3 percent to 11,484.69.
U.S. midweek stocks have struggled to find direction for much of the trading period as negotiations over the new fiscal stimulus package have yet to make a breakthrough.
In an interview with MSNBC news agency, U.S. House Speaker Nancy Pelosi on October 21 said she hoped both parties could address the "necessary issues" in the economic relief bill on the same day.
Earlier, speaking to the press, White House Chief of Staff Mark Meadows on October 20 said House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin had made "good progress" in discussing the stimulus package.
However, Mr Meadows added that Ms Pelosi and Mr Mnuchin "still have a lot of work to do" before an agreement is reached.
Yousef Abbasi, global market strategist at financial services firm StoneX, commented: "It seems that the market is raising concerns as negotiations over the relief package stalemate and cannot reach an agreement soon. Republican senators have opposed any bill more than their modest proposal, and many signal that the possibility of passing a bill on a pre-election relief package is far from over," he said.
Discussions between President Pelosi and the Secretary on October 20 continued at the last minute to come up with an agreement before the U.S. presidential election on November 3. Democrats and the Trump Administration have struggled for months to overcome fundamental disagreements over additional stimulus measures, including the value of money in support of the Covid-19 pandemic.
Goldman Sachs economist Alec Phillips said that "the biggest issues remain unsolved and an agreement is unlikely to be reached anytime soon". "The differences are still big while the time remaining is too little, it looks like Ms. Pelosi and Mr. Mnuchin will be very unlikely to reach an agreement before the election. In particular, even if the two sides agree on an agreement, the bill is unlikely to be passed before election day," Phillips said.
Meanwhile, U.S. media reported on Wednesday that U.S. Senate Majority Leader Mitch McConnell is said to have urged Republican lawmakers and the White House to oppose the deal on a large-scale aid package before the November 3 election.
In another development, Netflix shares slumped nearly 7% after announcing disappointing profits and lower-than-expected pay- users. Goldman Sachs and Boeing were the two biggest plunge stocks in the Dow Jones, losing 2.5 percent and 2 percent, on monday.
Shares in technology firm Snap jumped 28.3 percent to historic highs after reporting third-quarter trading results that far exceeded analysts’ expectations. Other technology stocks were also positive as Facebook rose 4.2%, Twitter jumped 8.4%, Alphabet added 2.3%.
Following Wall Street’s downward momentum, Asian stocks also fell in the October 22 session after the International Monetary Fund (IMF) lowered its regional economic forecast.
The MSCI Asia-Pacific index excluding Japan fell 0.57%.
In Japan, the Nikkei 225 slumped 0.74% while Topix fell 1.1%. ANA Holdings shares fell nearly 5 percent after the airline reported a loss of billions of dollars in the fiscal year to March. Japan Airlines shares also lost 2.8 percent.
The Chinese market also recorded a red with the Shanghai Composite down 0.83%, Shenzhen Component down 0.941%. The Hang Seng index on the Hong Kong exchange fell 0.22%.
In other markets also fell, with South Korea’s Kospi index losing 0.94 per cent, while Australia’s ASX 200 index was down 0.3 per cent.
The International Monetary Fund (IMF) on October 21 lowered its forecast for Asia-Pacific economic growth this year to -2.2%, the "worst figure in the region in decades".
"The Regional Economic Outlook report shows that recovery momentum began in the third quarter but uneven growth dynamics between countries, leading to disparities," said Jonathan D. Ostry, acting director of the Asia-Pacific Division at the IMF.
