Yahoo Finance Dow Falls as Mnuchin Pulls Emergency Lending Support
By Yasin Ebrahim
Investing.com - The Dow fell Friday as worries about the economic recovery continue to mount after U.S. Treasury Secretary Steven Mnuchin said emergency lending programs that had steadied the economy during the pandemic would not be renewed.
The Dow Jones Industrial Average fell 0.0.53%, or 155 points. The S&P 500 was down 0.27%, while the Nasdaq Composite rose 0.08 %.
Mnuchin said late Thursday he does not plan to extend several crucial emergency lending programs when they expire at the end of year, raising worries about the outlook for the recovery.
The treasury secretary said the programs "have clearly achieved their objectives," but analysts questioned the timing of the move as Covid-19 cases continue to surge.
"(D)epending on the depth and duration of the second-round resurgence and the subsequent policy response, the U.S. economy could slow significantly or potentially fall back into negative territory, creating a second-round recession," Stifel said in a note.
U.S. coronavirus cases reached another daily high Thursday with 185,759 new infections, according to Johns Hopkins University data.
Against the growing backdrop of worries about the recovery, industrials, energy, and financials slipped, dragging the broader market deeper into the red.
Financials were hurt by regional banks, with W. R. Berkley (NYSE:WRB), Citizens Financial Group (NYSE:CFG) and Regions Financial (NYSE:RF) down more than 2%. A slip in U.S. Treasury yields, with the United States 10-Year TIPS falling 2%, exacerbated weakness in banks.
Energy, meanwhile, shrugged off firmer oil prices, paced by a decline in Devon Energy (NYSE:DVN) and Marathon Oil (NYSE:MRO).
Elsewhere, stay-at-home stocks like Peloton Interactive (NASDAQ:PTON) and Zoom Video Communications (NASDAQ:ZM) rose, with the latter up more than 6% as investors bet that further restrictions will keep demand elevated.
On the vaccine front, Pfizer (NYSE:PFE) rose more than 1% after confirming it would apply on Friday for emergency use authorization for its Covid-19 vaccine. The U.S. Food and Drug Administration is expected to review the request in the coming weeks, and the vaccine, if approved, is expected to be rolled out before year-end.
In other news, Boeing (NYSE:BA) was down 1% even as reports suggested the 737 Max is nearing approval in Europe.
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