US: Stimulus doubts send stocks to gloomy finish

[NEW YORK] Wall Street closed lower on Wednesday following downbeat comments from lawmakers on the possibility of new stimulus for the struggling US economy, as well as continued fear of the coronavirus.

The benchmark Dow Jones Industrial Average dropped 0.6 per cent to 28,514.00, while the broad-based S&P 500 lost 0.7 per cent to end at 3,488.67.

The tech-rich Nasdaq Composite Index closed at 11,768.73 after losing 0.8 per cent.

Traders have spent months hoping lawmakers in Washington would deliver another shot of financing to the economy as it recovers from the coronavirus downturn, but in an interview Wednesday Treasury Secretary Steven Mnuchin said he was "far apart" with Democrats in negotiations.

Equities had opened cautiously higher after losing ground Tuesday, but went into the red following Mnuchin's comments, even though he said he would continue talking with Democratic House Speaker Nancy Pelosi.

"When Mnuchin commented over the stimulus, it hit the wire and the market sold off," said Quincy Krosby, chief market strategist at Prudential.

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Also spooking investors was Johnson & Johnson's announcement this week that they had to pause their coronavirus vaccine trial after a participant became ill. Eli Lilly's vaccine trial also was halted over an unspecified safety concern.

The announcements "had a dampening effect on the market that is looking for signs and positive announcements," Mr Krosby said.

Amazon was among the major stocks sliding Wednesday, losing 2.3 per cent, along with fellow tech titans Facebook, which lost 1.6 per cent and Microsoft, which fell 0.9 per cent.

AFP