Dow Deepens Losses as Pelosi Signals Work Still to Be Done Ahead of Deadline

By Yasin Ebrahim

Investing.com – The Dow fell Monday, as U.S. House Speaker Nancy Pelosi reportedly signaled that a deal was not imminent, denting hopes of a deal somewhat with just a day to go until the Tuesday deadline imposed by the house speaker. 

The Dow Jones Industrial Average fell 1.37%, or 391 points. The S&P 500 was down 1.56%, while the Nasdaq Composite slipped 1.46%.

As talks between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi got underway, Pelosi reportedly said that negotiators are still trying to reach consensus on a deal. Both sides had previously touted optimism they can get a deal over the line before the U.S. election.

White House Spokeswoman Alyssa Farah said Monday that the White House was "cautiously optimistic" Pelosi may be moving toward making a deal on the new stimulus package.

The White House's $1.8 trillion deal is short of the $2.2 trillion package proposed by the Democrats. Senate Republicans, meanwhile, will vote on a narrower $500 billion bill on Tuesday.

The selling in the broader market was led by tech as investors seemingly continue to ditch growth. Netflix kicks off earnings for FAANG stocks on Tuesday.

Ahead its quarterly earnings report, Netflix (NASDAQ:NFLX) rose more than 1%, despite some on Wall Street expressing concern the streaming giant's pace of content creation may struggle to keep up with demand, leading to a slowdown in subscriber growth.

"The extraordinary level of consumption of Netflix content multiplied by its large subscriber base suggests to us that some meaningful percentage of subscribers will 'finish' Netflix before a large quantity of new content can be produced," Wedbush said in a note.

Other mega-cap tech names were also lower. Facebook (NASDAQ:FB) Apple (NASDAQ:AAPL) Amazon.com (NASDAQ:AMZN) (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) traded in the red.

Financials started the week on a sour note, led by Intercontinental Exchange (NYSE:ICE), JPMorgan Chase (NYSE:JPM), and  State Street (NYSE:STT) with the latter down more than 3%.

Goldman Sachs Group (NYSE:GS), turned negative after rising intraday after Credit Suisse (SIX:CSGN) lifted its price target on the stock to $262 from $255.

In other news, AMC Entertainment  (NYSE:AMC) jumped 14% after New York Gov. Andrew Cuomo said theatres in most of New York, but excluding New York City, could reopen on Oct. 23. The cash-strapped theatre chain has warned it could run of cash by year-end of the first quarter of 2021 as delays to blockbuster movies and reduced box office sales owing to the impact of the pandemic.

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Sentiment was also weighed down by signs infections across the U.S. are gathering pace, with nearly 70,000 new cases recorded Friday, the highest one-day rise since July.

On the economic front, housing activity shows no sign of slowing after the National Association of Home Builders/Wells Fargo Housing Market Index rose two points to 85 in October.