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Dow Struggles on Uncertainty Over Stimulus Timing; Snap Soars

Stock MarketsOct 21, 2020 02:36PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow struggled for direction Wednesday, as investors mulled the latest progress on stimulus and a jump in social media stocks led by Snap following strong results.

The Dow Jones Industrial Average rose 0.07%, or 20 points. The S&P 500 was up 0.35%, while the Nasdaq Composite was up 0.32%.

House Speaker Nancy Pelosi said she is optimistic "over the prospect" of an agreement, though admitted that President Donald Trump would likely have to sway Senate GOP leader Mitch McConnell to back the deal, Politico reported, citing Pelosi's comments on Sirius XM (NASDAQ:SIRI).

Getting a stimulus deal over the line would "really be up to whether the president can convince Mitch McConnell to do so," Pelosi said, according to the report.

McConnell has previously expressed little desire to back a large stimulus package, preferring to roll out a $500 billion skinny relief bill that includes fiscal relief to Americans and small businesses. The Senate GOP failed to advance their $500 billion relief package after Democrats voted against the bill.   

The latest remarks on a deal come just a day after Pelosi conceded that differences over state and local funding, as well as language over insurance liability continued to weigh on talks.

Pelosi and Treasury Secretary Steven Mnuchin are set for talks at 2.30 ET on Wednesday.

The malaise in the broader market was kept in check by a jump in communication services as social media stocks followed Snap Inc (NYSE:SNAP) higher.

Snap surged 31% after the social media company reported a surprise quarterly profit, led by a jump in user growth. The better-than-expected performance prompted  Wedbush Securities to suggest that growth is likely to continue into Q4.

While Snap did not provide guidance, management did note that "revenue growth between 47 – 50% appears attainable, and the implied revenue figure of roughly $825 – 841 million is well above our prior estimate of $710 million and the prior consensus figure of $728 million," Wedbush said.

"Management also expects total DAUs of approximately 257 million, vs. our prior estimate of 255 million and prior consensus of 250 million," Wedbush added and raised its price target on the stock to $34.50 from $25.

Snap's bullish results pointed to signs of robust ad spending and triggered a surge in Twitter (NYSE:TWTR), Pinterest (NYSE:PINS) and Facebook (NASDAQ:FB).

Elsewhere on the earnings front, Netflix (NASDAQ:NFLX) fell 6% after the social media company's third-quarter profit and subscriber growth fell short of estimates as pull-forward demand seen earlier in the year faded.

Texas Instruments (NASDAQ:TXN), meanwhile, fell more than 2%, despite reporting quarterly results that topped Wall Street estimates. 

Energy was among the biggest losers intraday, paced by a fall in oil prices as data showing a draw in US weekly inventories was overshadowed by ongoing fears about demand weakness amid rising Covid-19 infections.

Dow Struggles on Uncertainty Over Stimulus Timing; Snap Soars
 

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Comments (16)
Fat Gorilla
FatGorilla Oct 22, 2020 12:43AM ET
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Shameful partisan tactics at the expense of suffering American families and small businesses.
Dietmar Stahl
Dietmar Stahl Oct 22, 2020 12:14AM ET
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A Biden vote will not give you what you think this time. More taxes on rich will only get reached thru the lines and end up with less pay, less benefits due to cost cutting. More taxes will have a hugh Exodus of capital to foreign countries = less jobs.A leanient China policy will also cost more jobs in US.More stimulus will increase debt and they will get it back to higher gasoline tax or elsewhere.Obama Care with penalty for not having insurance. Not what people was thinking about. Maybe the penalty is cheaper then the insurance.
ishak ahmad
ishak ahmad Oct 21, 2020 10:02PM ET
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what do you expect frm politicians! most corrupt ppl in the world !
Paulo Quintana
Paulo Quintana Oct 21, 2020 5:37PM ET
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Pelosi and Mitch need to be replaced plain and simple
Thom Miller
Thom Miller Oct 21, 2020 4:03PM ET
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Mission accomplished! I am living rent-free in Jay Sims’ otherwise empty and uneducated brain. Hey, Jay, I hope you don’t mind. I just redecorated up here with Obama, Clinton, and Biden posters. The place looks great!
Jay Sims
Jay Sims Oct 21, 2020 4:03PM ET
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Oh look, more nonsensical gibberish from Thom the Chinese bot. Wonder what nonsense it will spew out next... speak bot!
Attila Bakk
Attila Bakk Oct 21, 2020 3:58PM ET
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We shan’t lose hope that the almighty stimulus magically solves all our problems!
Jeffro Bodene
Jeffro Bodene Oct 21, 2020 3:52PM ET
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There will be no stimulus with McConnell and the other Tea Party Republicans in the Senate. They work for the Koch Brothers, not their constituencies. VOTE
Paulo Quintana
Paulo Quintana Oct 21, 2020 3:44PM ET
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Pelosi and Mitch need to be replaced plain and simple
Plopseven Schwartz
Plopseven Schwartz Oct 21, 2020 3:44PM ET
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Pelosi gave Mitch a bill five months ago. He should be fired for not doing his job.
Tim Gilbert
TimothyTekno2020 Oct 21, 2020 3:44PM ET
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It's the head of the Senate that's the problem. The House and White House are nearing an agreement and have the votes to pass a bill, but they don't have the GOP votes to pass a major stimulus. What matters to Americans?  A GOP majority, or just a Senate Majority?  We can only hope Mitch is voted out of the Senate, but I'm not counting on KY to do that.
Robert Nchor
Robert Nchor Oct 21, 2020 2:16PM ET
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Trump and the Republican senators are not united. And Pelosi is clearly milking it. Just going to twist Trump's hands and have him agree to a deal that the Republican senators will not accept. It's going to be an epic fall for the market if they fail to come up with something positive.
Bulls MakeMore
Bulls MakeMore Oct 21, 2020 2:16PM ET
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The market's not expecting anything until after the election. if there's no stimulus by February there might be a selloff
Alvin Sepulveda
Alvin Sepulveda Oct 21, 2020 2:16PM ET
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what does DAUs stand for
Tabi Chu
Tabi Chu Oct 21, 2020 2:16PM ET
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Daily average users
Tricky Dick
TrickyDick Oct 21, 2020 1:55PM ET
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Soaring over stimulus, struggling over stimulus, what a joke.
Stephen Corsaro
Stephen Corsaro Oct 21, 2020 1:51PM ET
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let them eat cake.
brijesh kumar singh
brijesh kumar singh Oct 21, 2020 1:44PM ET
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trump information that stimulus will come within. 48 hrs. refer Bloomberg.......
Plopseven Schwartz
Plopseven Schwartz Oct 21, 2020 1:44PM ET
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Oh cool, another ultimatum that will ignored.
Luis Bustamante
Luis Bustamante Oct 21, 2020 1:42PM ET
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Let the dead rest in peace. Stop ruining the country with this nonsense infinite printing that will destroy the dolar and the economy.
LC Gonzalez
Gnzlez_Suvillaga Oct 21, 2020 1:42PM ET
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👌👍 you got it!
Ross Dre
Ross Dre Oct 21, 2020 1:42PM ET
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LC Gonzalez also agree!
Matius Marvn
Matius Marvn Oct 21, 2020 1:40PM ET
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NO stimuli , game over , breaking
Ross Dre
Ross Dre Oct 21, 2020 1:38PM ET
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We never had a sell off over not having stimulus and now we’re set to get yet another pump. Well, a stale one at least. Running out of fuel.
 
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