US stocks fall amid doubts on stimulus prospects

The Dow ended lower for the first time in five sessions amid a broad-based sell across Wall Street after data showed high levels of weekly jobless claims.
A street sign is seen in front of the New York Stock Exchange in New York.,
A street sign is seen in front of the New York Stock Exchange in New York.,PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks retreated on Thursday (Sept 17) following mixed economic data and amid unease over a continued stalemate in Washington on additional government support for the coronavirus-battered US economy.

After a buoyant August, stocks have been under pressure for most of September given doubts about whether lofty valuations are justified.

The Dow Jones Industrial Average finished at 27,901.98, down 0.5 per cent.

The broad-based S&P 500 dropped 0.8 per cent to 3,357.01, while the tech-rich Nasdaq Composite Index fell 1.3 per cent to 10,910.28.

Comments from Democratic House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows suggested the two sides remain far apart on another round of stimulus.

"It seems like both sides have dug in," said Art Hogan, chief market strategist at National Securities, who added that the market had priced in a fiscal package of around US$1.5 trillion (S$2 trillion) that still shows no signs of coming to fruition.

Investor sentiment also has been dented by doubts over the timing of a coronavirus vaccine, Hogan said.

President Donald Trump has insisted that a vaccine will be ready by October, contradicting Centres for Disease Control and Prevention director Robert Redfield, who said on Wednesday one would not be widely available until well into 2021.

"There's a discrepancy on when we think there will be a vaccine broadly available," Hogan said.

"That's pushing out the timing on renewed economic growth."

Analysts fear that Washington's continued failure to produce additional stimulus will weigh on the economy after a partial rebound from the depths of the coronavirus shutdowns in the spring.

Economic data was mixed, with jobless claims inching lower but housing starts falling after a blockbuster July, both underperforming expectations.