US Stimulus Snags Send Wall Street Off Highs

NYSE
  • US stocks came off record highs Wednesday following new disagreements on an economic stimulus package, but Europe mostly rose as a high-level meeting on a post-Brexit deal was set to take place.
  • European traders focused heavily on the ongoing Brexit saga. British Prime Minister Boris Johnson has flown to Brussels for talks with EU chief Ursula von der Leyen, just weeks ahead of the December 31 deadline for a post-Brexit trade deal.
  • Britain made a gesture of good faith by withdrawing controversial elements of a legislative package concerning the future border in Ireland.
  • Visit The Financial Today’s homepage for more stories.

NEW YORK — US stocks came off record highs Wednesday following new disagreements on an economic stimulus package, but Europe mostly rose as a high-level meeting on a post-Brexit deal was set to take place.

Late Tuesday, the White House had put forward a fresh stimulus proposal of $916 billion, lifting hopes US lawmakers could pass a deal before the end of the month when some of the last pandemic aid programs expire.

That helped the S&P 500 push higher off a record close as trading got underway and the Dow hit a new intraday record, but the rally quickly ran out of steam and all three major indices finished in the red.

“You have a tug of war between virus news and vaccine news, and the tiebreaker has been the potential for a stimulus,” Art Hogan of National Holdings said. 

“When there’s any bump in the road, the market deserves a breather, and I think that’s what happened today.”

Leading Democrats, meanwhile, showed little enthusiasm for the White House plan. While the White House package includes new stimulus checks, they are half the amount of those sent out to Americans earlier this year, and the bill also has little money for additional unemployment benefits.

“An agreement doesn’t seem likely in the near-term,” analyst David Madden said.

Brexit Sentiment

European traders focused heavily on the ongoing Brexit saga. British Prime Minister Boris Johnson has flown to Brussels for talks with EU chief Ursula von der Leyen, just weeks ahead of the December 31 deadline for a post-Brexit trade deal.

“The future trading relationship between the UK and the EU remains in focus, and even though the situation is not looking overly optimistic at the moment, stock markets in Europe are a little higher,” said Madden.

London and Frankfurt ended the day with gains, while Paris slipped.

Britain made a gesture of good faith by withdrawing controversial elements of a legislative package concerning the future border in Ireland.

But while EU member Ireland said a pact between the sides on post-Brexit Northern Ireland offered some hope for a broader trade deal, optimism was at a premium.

Oil prices, meanwhile, turned lower after US government data showed that inventories of crude oil and petrol had risen, which investors considered as a sign of soft demand as more countries introduce stay-at-home orders to slow the spread of the coronavirus.

Key Figures (2200 GMT)

New York – Dow: DOWN 0.4 percent at 30,068.81 (close)

New York – Nasdaq: DOWN 1.9 percent at 12,338.95 (close)

New York – S&P 500: DOWN 0.8 percent at 3,672.82 (close)

London – FTSE 100: UP 0.1 percent at 6,564.29 points (close)

Frankfurt – DAX 30: UP 0.5 percent at 13,340.26 (close)

Paris – CAC 40: DOWN 0.3 percent at 5,546.82 (close)

EURO STOXX 50: UP 0.1 percent at 3,529.02 (close)

Tokyo – Nikkei 225: UP 1.3 percent at 26,817.94 (close)

Hong Kong – Hang Seng: UP 0.8 percent at 26,502.84 (close)

Shanghai – Composite: DOWN 1.1 percent at 3,371.96 (close)

Pound/dollar: UP at $1.3394 from $1.3355 at 2200 GMT

Euro/pound: DOWN at 90.14 pence from 90.62 pence

Euro/dollar: DOWN at $1.2079 from $1.2104

Dollar/yen: UP at 104.21 yen from 104.16 yen

West Texas Intermediate: DOWN 0.1 percent at $45.66 per barrel

Brent North Sea crude: DOWN 0.3 percent at $49.00 per barrel

AFP, Image by Glen MacLarty

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