Wall Street drops as stimulus delay weighs

(Reuters) – Wall Street’s main indexes slipped on Friday, heading for weekly losses as doubts over more economic stimulus dented sentiment, while data showing improved consumer sentiment kept losses in check.

FILE PHOTO: A man wears a protective mask as he walks past the New York Stock Exchange on the corner of Wall and Broad streets during the coronavirus outbreak in New York City, New York, U.S., March 13, 2020. REUTERS/Lucas Jackson/File Photo

Nine of the 11 major S&P indexes were down in morning trading, with energy and financials among the biggest decliners on profit taking in economically sensitive sectors, that have risen sharply recently on COVID-19 vaccine optimism.

With daily coronavirus death tolls at alarming levels, fresh business restrictions in many U.S. states and increasing layoffs, investors are counting on more fiscal relief to sustain a nascent economic recovery as most government aid has dried up.

However, alternating headlines on progress toward a stimulus deal have kept investors on edge, after optimism over a working vaccine pushed Wall Street’s main indexes to record highs this week.

House Speaker Nancy Pelosi on Thursday raised the possibility of stimulus negotiations dragging on through Christmas.

“Investors are wondering what is it that Congress needs to hear before they decide to act … their focus is more on politics than it is on the American economy,” said CFRA Chief Investment Strategist Sam Stovall.

“The economy is not getting stronger and it needs at least a short-term shot in the arm.”

While recent data has showed a faltering recovery in the labor market, a survey from the University of Michigan on Friday showed consumer sentiment improved more than expected in November.

At 10:01 a.m. ET, the Dow Jones Industrial Average fell 37.51 points, or 0.15%, to 29,961.75, the S&P 500 lost 12.24 points, or 0.33%, to 3,655.86, and the Nasdaq Composite lost 46.68 points, or 0.37%, to 12,359.41.

The communication services index remained a bright spot, lifted by Walt Disney Co. The media company hit a record high on announcing a heavy slate of new shows for its streaming services, including Marvel and Star Wars series on its fast-growing Disney+ platform.

The U.S. Food and Drug Administration said on Friday it was working rapidly to issue an emergency use authorization for Pfizer Inc’s COVID-19 vaccine, with the first Americans set to be immunized as early as Monday or Tuesday.

The U.S. drugmaker’s shares, however, gave up premarket gains and fell about 1%.

Qualcomm Inc fell 5.3% and was among the top decliners on the benchmark S&P 500, following a Bloomberg News report that Apple has started building its own cellular modem for future devices, a move that would replace components from the chipmaker.

Declining issues outnumbered advancers for a 1.6-to-1 ratio on the NYSE and a 1.3-to-1 ratio on the Nasdaq.

The S&P 500 posted six new 52-week highs and no new low, while the Nasdaq recorded 163 new highs and three new lows.

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