Stocks finished lower Thursday for a third day as hopes for a stimulus deal before Election Day faded, U.S. jobless claims unexpectedly rose, and Europe’s biggest cities imposed new measures to try to stop the spread of the coronavirus.
The Dow Jones Industrial Average pared earlier losses to end down 19 points, or 0.07%, to 28,494, the S&P 500 fell 0.15% and the Nasdaq declined 0.47%.
At its lowest point on Thursday the Dow was off 333 points, or nearly 1.2%.
Treasury Secretary Steven Mnuchin told CNBC Thursday the White House wouldn't let differences over funding targets for Covid-19 testing interrupt stimulus negotiations.
“What we have been focused on is the language around testing,” Mnuchin said. “When I speak to [House Speaker Nancy] Pelosi [Thursday], I’m going to tell her that we’re not going to let the testing issue stand in the way. We’ll fundamentally agree with their testing language subject to some minor issues. This issue is being overblown.”
President Donald Trump said Thursday he told Mnuchin the White could raise its relief offer above $1.8 trillion.
However, Senate Majority Leader Mitch McConnell told reporters Thursday in Kentucky that he didn’t see a compromise happening between the administration’s offer and the $2.2 trillion sought by Pelosi and that any stimulus should be substantially less than either proposal, Bloomberg reported.
McConnell said the narrow bill worth roughly $500 billion that he plans to put on the Senate floor next week is “what we think is appropriate to tackle this dread disease.”
Stocks finished lower Wednesday after Mnuchin said reaching an agreement on a stimulus package before Election Day would be difficult.
While talks between House Democrats and the White House have continued, the likelihood of a near-term relief package for the struggling U.S. economy has diminished as the two sides remain far apart.
The number of new applications for unemployment benefits unexpectedly crept higher last week, hitting the highest level since mid-August, as persistent layoffs continue to hold back the U.S. economic recovery.
The Labor Department reported Thursday that 898,000 Americans filed for first-time jobless benefits in the week ended Oct. 10, up from a downwardly revised 845,000 claims the week earlier. Analysts polled by FactSet had been expecting 825,000 claims.
"Seven months into the pandemic and on the verge of winter, the labor market is on thin ice," said AnnElizabeth Konkel, an economist at Indeed Hiring Lab.
"And still, the root of all this economic chaos persists," Konkel added. "Covid-19 cases have reversed their downward trajectory and health experts warn of upcoming holiday gatherings as potential virus incubators. If the coronavirus is not sufficiently brought under control, the labor market may backslide come winter."
Rising coronavirus infection rates in Europe, as well as in certain areas of the U.S., have made investors keenly aware of the economic impact of the pandemic.
Adding to the worries were the pause of two key vaccine trials amid concerns for participants' safety, and a halt to a major study on antibody treatments for similar reasons.
Morgan Stanley (MS) - Get Morgan Stanley (MS) Report posted stronger-than-expected third-quarter earnings, thanks in part to a surge in trading and wealth management revenue and lower provisions for bad loans.
Walgreens Boots Alliance (WBA) - Get Walgreens Boots Alliance Inc Report posted stronger-than-expected fourth-quarter earnings and said profit in the coming year should continue to grow despite the impact of the coronavirus pandemic.