Stocks Fall as Investors Discouraged by Stimulus Impasse

Stocks finish lower as investors look to the first presidential debate Tuesday evening and are discouraged by the fiscal-stimulus impasse.
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Stocks finished lower as investors looked ahead to the first debate Tuesday evening between U.S. President Donald Trump and Democratic presidential candidate Joe Biden and were discouraged by the lack of progress on fiscal stimulus.

House Democrats released a fresh $2.2 trillion coronavirus aid proposal on Monday evening, just as the global death toll from the virus passed 1 million. 

New York City's rate of positive virus tests was greater than 3%, the first time it has passed that level in months.

The 90-minute debate, with moderator Chris Wallace of Fox leading the questioning, begins at 9 p.m. ET. 

Trump is likely to face questions about his tax returns following a bombshell report from The New York Times, and about his handling of the coronavirus pandemic, which has claimed the lives of more than 205,000 Americans.

The Dow Jones Industrial Average finished down 131 points, or 0.48%, to 27,452, the S&P 500 declined 0.48%, while the Nasdaq was off 0.29%. 

Stocks in the energy and financial sectors were leading decliners. Airline companies were also hurting, with United Airlines  (UAL) - Get Report, Delta Air Lines  (DAL) - Get Report, Southwest Airlines  (LUV) - Get Report and American Airlines  (AAL) - Get Report all finished down.

Stocks fell even after consumer confidence in the U.S. in September rebounded 15.5 points to a reading of 101.8 from a revised 86.3 in August. That was the biggest one-month jump since April 2003.

Stocks finished sharply higher Monday as equities came off a four-week losing streak. The Dow gained 410 points, or 1.51%, to close at 27,584, the S&P 500 rose 1.61% and the Nasdaq rose 1.87%.

The scaled back $2.2 trillion coronavirus relief package released by House Democrats Monday evening would restore $600 weekly jobless benefits. 

The proposal is less than the $3.4 billion bill the House passed in May, but remains above what Senate Republicans have said they would accept.

A vote on the legislation could come later this week. House Speaker Nancy Pelosi spoke about the proposal with Treasury Secretary Steven Mnuchin on Monday evening and again Tuesday. 

A spokesman for Pelosi said they would be speaking again Wednesday. Negotiations over Covid-19 relief have been at a stalemate since early August.

Pelosi said the new stimulus package includes "new funding needed to avert catastrophe for schools, small businesses, restaurants, performance spaces, airline workers and others."

"While investors may be feeling optimistic about a stimulus, I think there are still some significant risks ahead the market today does not seem to be reflecting," said Ken Moraif, senior financial adviser at Retirement Planners of America. 

"We have what I believe is complete uncertainty about the impact of the upcoming election, the future path of Covid-19, and worries about rising infections in the winter, which could all stunt economic growth.

"While these issues have all been weighing on the market for weeks now and the market has remained relatively stable, it is difficult to predict if they ever will eventually catch up with the market. Right now, I am not overly optimistic about where the market is headed, but I do remain cautiously bullish."

The number of confirmed global deaths from Covid-19, the disease caused by the coronavirus, topped 1 million on Monday evening, according to Johns Hopkins University, almost 10 months after the disease first emerged in Wuhan, China.

The U.S. death toll is 205,676, the most in the world and more than 20% of the global total.

Brazil is second on the list, with more than 142,058 deaths, while India is third.

The virus has taken more lives this year than HIV, malaria, influenza and cholera, and many health experts say the true death toll from Covid-19 could be almost double, The New York Times reported.