Stocks fell on Wednesday, retreating from record highs set earlier in the day when technology stocks struggled and traders weighed the prospect of new fiscal stimulus.
The Dow Jones Industrial Average closed 105.07 points, or 0.35%, at 30,068.81. The S&P 500 fell 0.8% to 3,672.82. The Nasdaq Composite retreated 1.9% to close at 12,338.95. At the start of the session, the Dow gained more than 100 points. All three averages also touched new intraday records.
Apple was among the worst performing Dow components, falling more than 2%. Salesforce fell 3.2%. The S&P 500 tech sector fell 1.9% and led the index. Facebook was down 1.9% after the Federal Trade Commission joined several states in filing lawsuits that could force the social media giant to divest Instagram and WhatsApp.
NXP Semiconductor and Qorvo both fell more than 5% and were among the worst performing chips on Wednesday. The VanEck Vectors Semiconductor ETF (SMH) closed 3.1% lower. The entire technology sector came under pressure after DoorDash made its public debut. DoorDash’s shares closed 85% higher.
“I think we have a little digestive day after hitting new highs,” said Keith Lerner, chief marketing strategist at Truist. “There are some concerns about the business stimulus talks, but the leadership is still showing the market is headed for something” that’s happening on that front. Lerner pointed out that small-cap stocks weren’t down as much as large-cap indices.
The major averages returned their initial gains after Senate majority leader Mitch McConnell told Politico that Republicans and Democrats “are still looking for a way forward” for additional tax aid.
Those remarks came after Treasury Secretary Steven Mnuchin tabled a $ 916 billion stimulus package on Tuesday for House Speaker Nancy Pelosi.
McConnell, meanwhile, said he wanted Congress to pass a coronavirus relief bill that does not exonerate legal immunity for businesses or state and local authorities. Chuck Schumer, Chairman of the Senate Minority, DN.Y., said McConnell’s proposal to move the stimulus talks forward without state and local government assistance was not in good faith.
“The fiscal cycle in the US has been a little violent, but Congress has an additional 1.5 weeks to reach a compromise (as the budget deadline is about to be postponed,” said Adam Crisafulli of Vital Knowledge until December 18).
The volatile negotiations are taking place amid the worst days of the coronavirus pandemic. More than 200,000 Americans, on average, test positive for the coronavirus every day, according to a CNBC analysis of Johns Hopkins University data.
In the United States, 1 million new cases have emerged in just four days, bringing the national total to over 15 million.
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