Stocks fell slightly on Thursday as traders weighed the latest news surrounding U.S. fiscal stimulus negotiations and the upcoming election along with strong corporate earnings and economic data.
The Dow Jones Industrial Average dipped 100 points, or 0.3%. The S&P 500 was down by 0.3% and the Nasdaq Composite pulled back by 0.6%.
Thursday’s losses were kept in check after shares of Tesla, Coca-Cola, AT&T and CSX all rose on strong earnings results. Better-than-expected unemployment data also capped the market’s decline.
Traders continued to watch stimulus talks as markets swing this month on headlines regarding the talks. House Speaker Nancy Pelosi’s deputy chief of staff, Drew Hammill, continued to offer investors some incremental room for optimism late Wednesday.
Stimulus talks
“The Speaker & Secretary Mnuchin spoke today at 2:30 pm for 48 minutes. Today’s conversation brings us closer to being able to put pen to paper to write legislation,” Hammill wrote on Twitter just after the closing bell on Wall Street.
“The Speaker and Secretary plan to speak again tomorrow hopefully with further guidance from committee chairs as they work to resolve open questions,” he added.
The deputy chief of staff said that the White House and Democrats continue to narrow their differences over health priorities, but that more needs to be done to ensure schools are safe.
Traders appeared to handicap Hammill’s comments, however, given weeks of similar comments yet little tangible evidence that Pelosi and Treasury Secretary Steven Mnuchin will be able to send a bill to President Donald Trump’s desk before the Nov. 3 elections.
Trump also tweeted on Wednesday: “Just don’t see any way Nancy Pelosi and Cryin’ Chuck Schumer will be willing to do what is right for our great American workers, or our wonderful USA itself, on Stimulus.”
“With no clear end to the pandemic in sight, the economy needs additional fiscal support that will last for several months,” Prajakta Bhide, a strategist at MRB Partners, said in a note. “The passing of a sizeable additional fiscal stimulus by the beginning of next year, and better control over the COVID-19 pandemic next year via the timely approval of a medical solution will be essential to ensure continued economic growth next year.”
Earnings
Companies continued to file third-quarter earnings reports on Wednesday, with both electric car maker Tesla and burrito chain Chipotle offering investors updates on their businesses.
Elon Musk’s Tesla reported its fifth straight quarter of profits, reporting per-share earnings of 76 cents versus the consensus estimate of 57 cents expected by analysts polled by Refinitiv. The company had already reported that it delivered 139,300 vehicles during the quarter, a new record for Tesla.
CEO Musk noted on the company’s earnings call that Tesla plans to start delivering cars from new factories in Brandenburg, Germany and Austin, Texas in 2021 but that output could be slow at first. The stock was up 3.8%
Coca-Cola rose more than 1% after the company reported a stronger-than-forecast profit for the previous quarter. CSX, Dow Inc and AT&T also rose on the back of better-than-expected earnings.
Chipotle Mexican Grill, meanwhile, saw its equity fall 6.4% after it said a shift to delivery orders ballooned costs and led to reduced drink sales in the third quarter.
Election
Futures came under some pressure overnight after U.S. officials said Iran is taking steps to interfere in the U.S. presidential election, and Russia has obtained American voter information.
Specifically, Director of National Intelligence John Ratcliffe said that Iran has been sending “spoof emails designed to intimidate voters, incite unrest and damage” President Donald Trump.
The announcement from the nation’s top intelligence officials came amid an already-fierce election season and adds to uncertainty as the U.S. tries to navigate the health and economic fallout caused by the coronavirus.
The after-hours moves came on the heels of losses on Wall Street during Wednesday’s regular session. The Dow Jones Industrial Average slipped 97.97 points, or 0.4%, reversing a gain of more than 100 points earlier in the day. The S&P 500 dipped 0.2% while the Nasdaq Composite shed 0.3% on Wednesday.
On the data front, the Labor Department said weekly jobless claims fell to 787,000 for the week ending Oct. 17. That marks the first time since March that claims come in below 800,000. Economists polled by Dow Jones expected first-time applicants for state unemployment insurance to have totaled 875,000.
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