(Bloomberg) — Stocks fell on speculation that a rally to a six-week high has outpaced prospects for a quick end to the stalemate over economic stimulus. Treasuries and the dollar rose.
The S&P 500 dropped, led by banks, as JPMorgan Chase & Co. said its surprisingly-good reserve release didn’t reflect a better view of the economy and Citigroup Inc. reported a jump in costs. Delta Air Lines Inc. tumbled as a decision to delay $5 billion in jetliner deliveries signaled weak travel demand. Johnson & Johnson sank as the drugmaker paused its late-stage study of a coronavirus vaccine. Amazon.com Inc. climbed as its two-day Prime Day sale kicks off, while Apple Inc. came off session lows ahead of a key product event.
Read: Bond Market’s Reflation Bets Face Risk of a Divided Government
House Speaker Nancy Pelosi told her Democratic colleagues that President Donald Trump’s latest stimulus proposal falls short of what’s needed to shore up the economic recovery and battle the coronavirus. Pelosi and Treasury Secretary Steven Mnuchin negotiated over the weekend on the administration’s new $1.8 trillion proposal. No talks were announced Monday, and it’s unclear when or whether they’ll resume. The International Monetary Fund warned that the world still faces an uneven recovery until the pandemic is tamed.
“The rally has gotten a little bit ahead of itself,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “We have a little bit of negative news on one of the vaccine trials, so the market has taken a bit of a breather. You throw in political risks as well, and we think that could make for a very volatile fourth quarter.”
Democrats began their highly anticipated interrogation of Amy Coney Barrett on Tuesday, raising dire predictions of how she might overturn long-standing U.S. Supreme Court rulings guaranteeing abortion rights and more recent decisions upholding the Affordable Care Act.
Here are some key events coming up
Results from Wells Fargo, Bank of America and Goldman Sachs are due Wednesday; Morgan Stanley’s earnings are scheduled for Thursday.U.K. Prime Minister Boris Johnson set a deadline of Thursday to thrash out the outline of a European Union trade deal.European Central Bank President Christine Lagarde leads off the virtual annual meetings of the International Monetary Fund and the World Bank Group. Through Oct. 18.
These are some of the main moves in markets:
The S&P 500 decreased 0.4% as of 10:43 a.m. New York time.The Stoxx Europe 600 Index sank 0.6%.The MSCI Asia Pacific Index rose 0.1%.
The Bloomberg Dollar Spot Index rose 0.3%.The euro declined 0.4% to $1.1766.The Japanese yen weakened 0.2% to 105.59 per dollar.
The yield on 10-year Treasuries declined three basis points to 0.74%.Germany’s 10-year yield fell one basis point to -0.55%.Britain’s 10-year yield decreased two basis points to 0.251%.
The Bloomberg Commodity Index fell 0.4%.West Texas Intermediate crude increased 1.6% to $40.07 a barrel.Gold weakened 1.2% to $1,900.38 an ounce.
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