US: Big Biden stimulus no balm for US stocks, Dow loses 0.6%
[NEW YORK] President-elect Joe Biden's massive plan to help the US economy didn't shake Wall Street's downbeat sentiment on Friday, with major indices losing ground in the last full trading week of Donald Trump's presidency.
Markets opened to news that retail sales in December had slid farther than expected as consumers and businesses struggled under the weight of rising Covid-19 cases. Major banks unveiled mixed earnings reports while hoping Covid-19 vaccines will bring better days.
The benchmark Dow Jones Industrial average closed down 0.6 per cent at 30,814.26, while the broad-based S&P 500 lost 0.7 per cent to finish at 3,768.25.
The tech-rich Nasdaq Composite Index closed at 12,998.50 after losing 0.9 per cent, underscoring Wall Street's retreat from records set last week.
Overall, the Dow lost 0.9 per cent for the week, and the Nasdaq and S&P 500 lost 1.5 per cent.
Mr Trump will on Wednesday hand over power to Mr Biden, who has proposed spending US$1.9 trillion to help the US economy come back from the mass layoffs and sharp downturn in growth caused by the Covid-19 pandemic.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The package, unveiled after markets closed Thursday, includes everything from expanded unemployment benefits to tax credits aimed at poor Americans to money to fight infections, but Wells Fargo Advisors warned traders are finding things in the proposal they don't like.
"Sentiment is being dampened, however, amid speculation that the increase in government spending could bring about higher taxes," they said in an analysis.
Also spooking Wall Street was the Commerce Department's report that retail sales declined 0.7 per cent in December, despite holiday shopping, underscoring that the US economy was far from healed.
Among fourth-quarter bank earnings, JPMorgan reported record quarterly profits of US$12.1 billion, but Citigroup said earnings dipped seven per cent to US$4.6 billion. At Wells Fargo, profits edged up four per centto US$3 billion as revenues fell 10 per cent.
Wall Street pushed all three institutions, with shares of JPMorgan falling 1.2 per cent to US$138.64 at the close, Citigroup sinking 6.9 per cent to US$64.23 and Wells Fargo diving 7.8 per cent to US$32.04.
AFP
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Capital Markets & Currencies
Europe: Shares end higher on tech support; banks slide
US: Stocks rally on cooler hiring numbers
Singapore stocks end week in the red; STI down 0.1%
Asia: Markets track Wall Street higher as rate hopes rise, eyes on US jobs
H2G Green chief to stand trial on Aug 5 amid MOM probe
Singapore shares climb at Friday’s open; STI up 0.2%