Wall Street drops as stimulus delay weighs; Disney soars

(Reuters) – Wall Street’s main indexes slipped on Friday and were set to register their worst week since late October, as doubts over fresh economic stimulus dented confidence, even as regulators inched toward emergency use approval of a COVID-19 vaccine.

FILE PHOTO: A man wears a protective mask as he walks past the New York Stock Exchange on the corner of Wall and Broad streets during the coronavirus outbreak in New York City, New York, U.S., March 13, 2020. REUTERS/Lucas Jackson/File Photo

A 13% jump in the shares of Walt Disney Co helped limit losses on the Dow, as the media company announced a heavy slate of new shows for its streaming services and said it expects as many as 350 million global subscribers by the end of fiscal 2024.

Ten of the 11 major S&P indexes were lower in afternoon trading, with energy and financials among the biggest decliners, while the communication services index remained a bright spot.

With daily coronavirus death tolls at alarming levels, fresh business restrictions in many U.S. states and increasing layoffs, investors are counting on more fiscal relief to sustain a nascent economic recovery as most government aid has dried up.

However, alternating headlines on progress toward a stimulus deal have kept investors on edge, after optimism over a working vaccine pushed Wall Street’s main indexes to record highs this week.

House Speaker Nancy Pelosi on Thursday raised the possibility of stimulus negotiations dragging on through Christmas.

“Investors are wondering what is it that Congress needs to hear before they decide to act … their focus is more on politics than it is on the American economy,” said CFRA Chief Investment Strategist Sam Stovall.

“The economy is not getting stronger and it needs at least a short-term shot in the arm.”

While recent data has showed a faltering recovery in the labor market, a survey from the University of Michigan on Friday showed consumer sentiment improved more than expected in November.

“The synchronized effort (fiscal and monetary policy) and the vaccine should be a powerful combination to have a year of meaningful economic expansion,” said Marco Pirondini, U.S. head of equities at Amundi Pioneer Asset Management.

At 11:46 a.m. ET, the Dow Jones Industrial Average fell 134.01 points, or 0.45%, to 29,865.25, the S&P 500 lost 28.87 points, or 0.79%, to 3,639.23, and the Nasdaq Composite lost 125.49 points, or 1.01%, to 12,280.32.

The U.S. Food and Drug Administration is expected to issue an emergency use authorization for Pfizer Inc’s COVID-19 vaccine later in the day, the New York Times reported.

The U.S. drugmaker’s shares, however, gave up premarket gains and fell about 1.5%.

Qualcomm Inc fell 8% and was among the top decliners on the benchmark S&P 500, following a Bloomberg News report that Apple has started building its own cellular modem for future devices, a move that would replace components from the chipmaker.

Declining issues outnumbered advancers for a 1.9-to-1 ratio on the NYSE and a 1.9-to-1 ratio on the Nasdaq.

The S&P 500 posted seven new 52-week highs and no new low, while the Nasdaq recorded 227 new highs and 18 new lows.

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