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US Stocks Slip as Virus Deal Elusive   10/21 16:10

   U.S. stocks capped another wobbly day of trading with modest losses 
Wednesday as Wall Street waited for any signs of progress as lawmakers in 
Washington negotiate over how to deliver more aid for the economy.

   (AP) -- U.S. stocks capped another wobbly day of trading with modest losses 
Wednesday as Wall Street waited for any signs of progress as lawmakers in 
Washington negotiate over how to deliver more aid for the economy.

   The S&P 500 slipped 0.2% after shifting between small gains and losses for 
much of the day. The benchmark index is on track for its first weekly loss 
after notching gains in each of the past three weeks. Losses in industrial 
stocks, health care companies and elsewhere in the market outweighed solid 
gains by communication services stocks. Treasury yields were mixed.

   Much of Wall Street's focus has been on Washington, where White House 
officials and Democrats are negotiating on another round of support to prop up 
the still-struggling economy, though the prospects for a deal that delivers aid 
soon remain cloudy.

   "As long as the parties involved give the market a headline suggesting 
they're still negotiating, there's a kernel of optimism in the market," said 
Quincy Krosby, chief market strategist at Prudential Financial. "But then 
there's also concern that this is extreme political posturing and that a deal 
will not be forthcoming."

   The S&P 500 fell 7.56 points to 3,435.56. The Dow Jones Industrial Average 
lost 97.97 points, or 0.4%, to 28,210.82. The index had briefly been up 141 
points. The Nasdaq composite gave up 31.80 points, or 0.3%, to 11,484.69.

   Stocks of social media companies were among the biggest gainers after Snap 
reported even bigger jumps in revenue and in the number of Snapchatters using 
its service each day than analysts expected.

   Snap surged 28.3% following its quarterly profit report. In its wake, 
Twitter jumped 8.4%, the biggest gainer in the S&P 500, and Facebook rose 4.2%.

   Google's parent company rose 2.3%, adding to its gains from a day before 
when the Justice Department sued it for antitrust violations. Investors had 
already been expecting such action, and analysts said Google's counterarguments 
mean it will likely take years to reach a resolution.

   On the losing end was Netflix, which fell 6.9% for one of the largest losses 
in the S&P 500 after it said growth in its subscriber rolls slumped by more 
during the summer than it had forecast. It also reported a weaker quarterly 
profit than analysts expected, following a surge earlier this year when people 
were yearning for things to watch amid coronavirus-caused lockdowns.

   It's a rare disappointing report in what's so far been a much better 
earnings season than Wall Street girded for. Roughly one in six of the 
companies in the S&P 500 index has reported its results for the 
July-through-September quarter, and most have topped the low expectations 
analysts had set.

   S&P 500 companies are on track to report a decline of a little less than 18% 
in earnings per share for the quarter from a year ago, which is not as bad as 
the 21% drop that analysts were forecasting at the end of the quarter, 
according to FactSet.

   Traders have been keeping one eye on corporate earnings, and another on the 
prospects for more economic stimulus out of Washington.

   The two sides have been making progress, House Speaker Nancy Pelosi told her 
Democratic colleagues in a letter late Tuesday. She said she hopes discussions 
will continue, past a self-imposed deadline of Tuesday.

   Markets have been swinging recently with the perceived prospects of such 
stimulus. Investors have been clamoring for it since the summer, when extra 
benefits for laid-off workers and other support provided by the last round of 
aid approved by Congress expired.

   But even if leaders from the White House and House of Representatives can 
reach a compromise soon, its fate looks unclear on Capitol Hill due to its 
growing price tag. Senate Majority Leader Mitch McConnell told fellow 
Republicans that he has warned the White House not to divide the party by 
sealing a relief deal before the election that could cost $2 trillion.

   Regardless of the opposition, Jeffrey Halley of Oanda said, "the one lesson 
we can take is that the U.S. fiscal stimulus package remains the only thing 
financial markets are concentrating on, to the exclusion of everything else."

   While investors focus on government aid prospects, the market is still 
showing signals that the economy is expected to continue its recovery, said 
Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment 
Management. He said smaller company stocks have been gaining ground in a sign 
of confidence, while bond yields continue rising. The broader market is also 
seeing more even gains from previously downtrodden sectors, such as industrial 
companies and businesses that rely on consumer spending.

   "There is a lot of focus on Washington, but the market is telling you the 
economy is coming back very much in a ?V' pattern."

   The yield on the 10-year Treasury rose to 0.82% from 0.81% late Tuesday. 
It's been generally climbing since dropping close to 0.60% early last month.

   European markets closed broadly lower, while Asian markets closed higher.

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