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Dow Sheds 375 Points After Stimulus Setback

Stock MarketsOct 06, 2020 04:06PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow turned negative on Tuesday as President Donald Trump rejected U.S. House Speaker Pelosi's $2.4 trillion stimulus proposal, instructing his representatives to halt talks until after the election.

The Dow Jones Industrial Average fell 1.34%, or 375 points. The S&P 500 was down 1.4%, while the Nasdaq Composite fell 1.57%.

Trump accused the Pelosi of "not negotiating in good faith" and said her stimulus proposal was "in no way related to Covid-19."

The move dealt a blow to hopes of further stimulus, which Federal Reserve chairman Jerome Powell said was needed to ensure a robust recovery.

"Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses," Powell said in a speech at a virtual annual meeting held by the National Association for Business Economics. "Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth."

Value stocks -- those linked to the strength of the economy like financials, industrials, and materials -- fell into the red, dragging the broader market down.

Industrials were also held back by a fall in Boeing (NYSE:BA) after the aircraft maker cut its forecast for demand and warned it could take more than a decade to recover from the Covid-19 pandemic.

The aircraft maker forecasts demand for 18,350 commercial airplanes in the next decade, down 11% from its 2019 projection.

Tech, which had struggled for momentum intraday amid expectations that rising rates will hurt growth stocks, fell sharply.

Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) Alphabet (NASDAQ:GOOGL) Amazon.com (NASDAQ:AMZN) and Facebook (NASDAQ:FB), which together make up a quarter weighting of the S&P 500, down more than 2%.

Energy also ended in the red, though fears supply weather-related disruptions eased downside momentum. Still, demand concerns linger after the Energy Information Agency forecast output to fall by 800,00 barrels per day, a smaller decline than its previously monthly forecast for a 870,000 drop.

In other news, NVIDIA (NASDAQ:NVDA) ended higher after BMO raised its price target on the stock to $650 a share from $565 per share, citing higher earnings-per-share potential.

Dow Sheds 375 Points After Stimulus Setback
 

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Comments (133)
Tony Coll
Tony Coll Oct 07, 2020 4:18AM ET
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Has anyone noticed the democrats proposal keeps moving up? What happened to 2.2 trillion? Not sure they understand compromise/negotiation. And if they truly cared, because they know the senate will not accept a proposal over 2 trillion, then they would approve the 1.6 so they can get it out to the people.
Bulls MakeMore
Bulls MakeMore Oct 06, 2020 10:39PM ET
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Trump won't be bullied by Pelosi, plain and simple.
Kc Pc
Kc Pc Oct 06, 2020 9:43PM ET
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if Trump can't win again no one will win till new term.
Chris Sundo
Chris Sundo Oct 06, 2020 9:43PM ET
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if readers of your comment cant understand the logic of your comment they will politely ignore it.
Andy Yuan
Andy Yuan Oct 06, 2020 9:43PM ET
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Ur not in north Korea. Thats why here is election going on.
Sean Livingstone
Sean Livingstone Oct 06, 2020 7:52PM ET
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News are just excuses. We hit resistance and fall back. Touch support and hold. That is so simple.
Attila Bakk
Attila Bakk Oct 06, 2020 7:52PM ET
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Election results and future Trump tweets baked in already lol
Tricky Dick
TrickyDick Oct 06, 2020 7:46PM ET
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In a few hours some BS news will come across that will "give investors hope" of a stimulus. This is getting so worn out.
Chris Sundo
Chris Sundo Oct 06, 2020 7:46PM ET
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.. including donnie saying 'oops, i meant the opposite' .. after he went long at noon today. -- After all, he needs to service 300M in debt soon and make a quick buck in the meantime ;)
Tricky Dick
TrickyDick Oct 06, 2020 7:44PM ET
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within a few hours we'll get some phony BS that all is good and they'll go back up. This is getting old.
Ankur Pandey
Ankur Pandey Oct 06, 2020 7:44PM ET
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Jay West
Jay West Oct 06, 2020 7:44PM ET
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Buy the dips I suppose.
New Jazenevd
New Jazenevd Oct 06, 2020 7:43PM ET
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Trump discontinues useless talks with pelosi to concentrate on more important issue: SCOTUS confirmation process. Correct decision.
Khalid Dokali
Khalid Dokali Oct 06, 2020 7:41PM ET
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No more easy "printed' money for lazy americans, if you want money just work hard
Chris Sundo
Chris Sundo Oct 06, 2020 7:37PM ET
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It's a bluff, guys. He bought stocks at the close and tmr morning he'll say 'I wasn't feeling well and I actually meant the inverse, sorry if I got you all messed up'.  Not sure if the SEC is recording all of this, but the way they've been acting I don't trust them either.
Christopher Dunson
Christopher Dunson Oct 06, 2020 7:34PM ET
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Pelosi turned down the 1.6 T offered by Trump.
New Jazenevd
New Jazenevd Oct 06, 2020 7:32PM ET
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No good reason to give money to dems. They will waste any amount.
jonathan seagull
jonathan seagull Oct 06, 2020 7:31PM ET
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I’m republican but do not support him at all. We need better leader and anyone on the street would be better than him as a human.
Tony Coll
Tony Coll Oct 06, 2020 7:31PM ET
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Then you are not a republican
Kevin Silver
Kevin Silver Oct 06, 2020 7:29PM ET
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its all about his own selfish means to an end. make America great again was just a facade. if he's for Americans, he would be all for the stimulus earlier than later.
justin namon
justin namon Oct 06, 2020 7:27PM ET
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Anyone know where I can get calls on hubris?
rob finch
rob finch Oct 06, 2020 7:03PM ET
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The democrats won't negotiate because they might not have to. If Biden wins dems get their terms. If Trump wins then maybe the dems will negotiate. Or maybe they will act like babies for 4 more years.
Clinton Powell
Clinton Powell Oct 06, 2020 6:48PM ET
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Yea hes done mothing anywayWere do you live Venus?
Peter Dikeakos
Peter Dikeakos Oct 06, 2020 6:48PM ET
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Trump Is Losing It. And He Is Being Treated Like A Loser.
Paul Sutton
paulsmith007 Oct 06, 2020 6:46PM ET
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He knows he cant win the election. Im sure he and his family will trade the market around his tweets. Vote this human cancer out.
Jimmy Coyne
Jimmy Coyne Oct 06, 2020 6:41PM ET
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Investing.com is part of the fake news. Cant the writers admit they have no idea what theyre talking about.
James Marshall
James Marshall Oct 06, 2020 6:39PM ET
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Trump forever. The Dems want money for the cities they destroyed
Tony Ab
Tony Ab Oct 06, 2020 6:39PM ET
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100% why he should give money to anarchist , socialist sh.. hole cities ( i live on one ) let them choke
John Austin
John Austin Oct 06, 2020 6:39PM ET
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Meanwhile trump destroys the entire country.
Sam Same
Sam Same Oct 06, 2020 6:39PM ET
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trump destroys whole country by wanting the lock down to stop. hur duuuuuur
Tony Coll
Tony Coll Oct 06, 2020 6:39PM ET
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John Austin award for most basic baseless comment on this thread goes to you buddy. Congrats!
Joe Woidich
Joe Woidich Oct 06, 2020 6:37PM ET
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Trump doesn't care about anyone but himself. No word at all from him on the First Lady. He's "pro Trump" not "pro America."
Patron Silver
Patron Silver Oct 06, 2020 6:37PM ET
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he would step over her in a split second if there was stampede
Tony Coll
Tony Coll Oct 06, 2020 6:37PM ET
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Where do you guys get this stuff from?? Seriously, this is why dems will lose this election, there is no reason in your arguments, no facts, no figures, just pure manufactured bs.
Tony Hoerter
Tony Hoerter Oct 06, 2020 6:28PM ET
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Good, Pelosi trying to push through unnecessary debt is a joke.
Rob Omes
Rob Omes Oct 06, 2020 6:26PM ET
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Those are the last hick-ups Trusty Trump can made his friends money. For sure he will get lots in return after his presidency life. The man ****and is a complete disaster for the world.
Tony Coll
Tony Coll Oct 06, 2020 6:26PM ET
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So Trump/Reps trying to pass a bill with 800 billion less than what the dems are pushing is him trying to make money for who exactly?? Who pays you people to make these nonsensical comments??
Anthony Anthony
Anthony Anthony Oct 06, 2020 6:23PM ET
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Hahaha... Dirty tactic. What he tries to say is vote for me or u ain't get a dime of free money.
Ben Ramirez
Ben Ramirez Oct 06, 2020 6:23PM ET
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There is no deadline to stimulus.  But ya, this tactic is to impress his dam dunb@55 voters.
jonathan seagull
jonathan seagull Oct 06, 2020 6:23PM ET
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So, in other words, he is threating citizens on greenback point.
Fat Gorilla
FatGorilla Oct 06, 2020 6:19PM ET
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Last week: If Biden wins, markets will crash.Yesterday: Work together and pass stimulus for the American people.Today: The people will get nothing until after the election, if I win.This guy is a selfish mf who will take everyone and the markets down with him.
Ben Ramirez
Ben Ramirez Oct 06, 2020 6:19PM ET
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Well, he's right about Biden winning.  If he does, markets will crash for sure.  Short it.
Jacob Steinschlag
Jacob Steinschlag Oct 06, 2020 6:19PM ET
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Even after what happened today you think that biden is worse for the markets than trump? Without trump we wouldnt have had the covid crash in the first place, yet you still seek to blame others for things that havent even happened yet
Fat Gorilla
FatGorilla Oct 06, 2020 6:19PM ET
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They are both lousy. One lies with a straight face. One weara lies on his face.
gordon woo
gordon woo Oct 06, 2020 6:19PM ET
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down temporary if Biden wins.
 
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