US: Wall Street ends in the red on renewed pessimism on stimulus

[NEW YORK] US stocks reversed course on Tuesday to end in the red, with all three major indices dropping and the broad S&P 500 closing lower for the first time in eight days.

At the closing bell, the Dow Jones Industrial Average was down 0.4 per cent to 27,686.91 and the S&P 500 fell 0.8 per cent to 3,333.69.

The Nasdaq continued its recent slide to close with a loss of 1.7 per cent to finish at 10,782.82.

Wall Street tanked with less than an hour left in the trading session, after Republican Senate leader Mitch McConnell poured cold water on prospects for a deal on a new pandemic aid bill.

"And so another day has gone by with an impasse and they need to get together," Mr McConnell said on Fox News.

Investors were cheered early in the day by news of a Russian Covid-19 vaccine and by President Donald Trump floating the idea of cutting capital gains taxes - lower taxes on selling investments like stocks are usually welcomed by markets.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

But analysts said traders were operating on the assumption a deal on an emergency spending package was just a matter of time.

Quincy Krosby of Prudential said the course correction was sparked by Mr McConnell's pessimism but noted that "This is a lower volume market given the summer lull, and markets reactions can move higher and lower more swiftly."

The losses were widespread across many sectors, and short-circuited the S&P's moves towards a new record.

Apple, which was on the verge of topping US$2 trillion in market value, lost nearly 3.0 per cent to close at US$437.50.

Video meeting service Zoom lost 7.6 per cent, and other big losers spanned the spectrum, including Facebook, Walgreens Boots Alliance, Microsoft, Pfizer and Walmart.

AFP