Stocks Decline in Final Hour as Stimulus Talks Continue
Stocks traded lower on Wednesday amid stimulus negotiations.
The Dow and broader U.S. stock market traded within a narrow range on Wednesday, as investors continue to monitor stimulus talks in Washington.
Wall Street’s major indices settled lower after a back-and-forth session. The Dow Jones Industrial Average (DIA) declined 97.97 points, or 0.4%, to 28,210.82.
The broad S&P 500 Index (SPY) of large-cap stocks declined 0.2% to close at 3,435.56. Nine of 11 primary sectors reported losses, with energy companies leading the declines. Materials also traded sharply to the downside.
Meanwhile, the technology-focused Nasdaq Composite Index (QQQ) declined 0.3% to settle at 11,484.69.
A measure of 30-day volatility known as the CBOE VIX (VXX) traded within a narrow range on Wednesday. The so-called “fear index” peaked at 30.55 on a scale of 1-100 where 20 represents the historic average. It would eventually reverse course to settle down 1.8% at 28.81.
Investors are cautiously optimistic about the potential for a new stimulus deal in the coming days after lawmakers shrugged off a self-imposed deadline proposed by House Speaker Nancy Pelosi. Although both sides seem to be making progress, Senate Republicans are likely to oppose the deal. Senate Majority Leader Mitch McConnell is instead focusing on a ‘skinny bill’ that puts money directly into the hands of Americans.
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The Final Word: Investors can expect a high degree of turbulence over the next two weeks as Donald Trump continues to narrow the gap in the presidential polls. A contested election is a short-term risk for markets, regardless of who wins.