US STOCKS-Wall St ends lower with Washington turmoil, earnings in view

  • 1/11/2021
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(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window) (Updates with market close at 4 p.m.) NEW YORK Jan 11 (Reuters) - Wall Street’s main indexes closed lower on Monday as investors took some profits after last weeks’ record levels while they waited for earnings season to begin and eyed events in Washington with trepidation. U.S. stocks had rallied last week as investors bet that Democrats’ win of Georgia runoff elections would bring a higher likelihood of a heftier fiscal stimulus package to boost the pandemic-savaged economy. But some investors worried stimulus could be delayed as House Democrats introduced a resolution to impeach U.S. President Donald Trump, accusing him of inciting insurrection following a violent attack on the Capitol by his supporters. “When markets are looking at something as critical as the governance of the United States, even a little bit of uncertainty can have a meaningful impact,” said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts. “What does that do to the ability of the parties to work together to pass policy things like stimulus.” McMillan said investors also worried about more attacks. The FBI has warned of possible armed protests being planned for Washington, D.C., and at all 50 U.S. state capital cities in the run-up to President-elect Joe Biden’s inauguration on Jan. 20, a federal law enforcement source said on Monday. “Generally speaking, Washington doesn’t make too much of a difference but since policy is influencing so much of what’s expected around the economy, this is kind of a unique time,” he said. But with U.S. Treasury yields rising on Monday and outperformance of economically-sensitive sectors such as energy and financials, Keith Lerner, chief market strategist at Truist Advisory Services in Atlanta, Georgia, said investors were still hopeful about stimulus. “After last week the market is in a little bit of a digestion phase. Underneath the surface what you’re seeing continue is the reflation trade,” said Lerner. “This is a continuation of the expectation of more fiscal stimulus.” And along with wariness about Trump’s last nine days in office, Lerner also cited uncertainty ahead of the unofficial start of earnings season on Friday when banks such as JPMorgan report results. After the market’s big run up last week and in the last trading days of 2020, it is “somewhat impressive” there is not more profit taking, he said. Unofficially, the Dow Jones Industrial Average fell 0.29% to end at 31,008.69 points, while the S&P 500 lost 0.66% to 3,799.61. The Nasdaq Composite dropped 1.25% to 13,036.43. Shares of the micro-blogging site Twitter Inc tumbled after it permanently suspended Trump’s account. But it shares were still about 160% higher that where they traded before Trump won the Presidential election in 2016. Other Big Tech firms Facebook Inc, Alphabet Inc-owned Google and Apple Inc were also weak on Monday as they took their strongest actions yet against Trump to limit his social media reach. Investors are expecting guidance on the extent to which executives see a rebound in 2021 earnings and the economy from results and conference calls from JP Morgan, Citi and Wells Fargo Friday. Boeing Co fell on Monday after a 737-500 jet operated by Indonesia’s Sriwijaya Air with 62 people on board crashed on Saturday. However, shares in Eli Lilly and Co rose sharply on Monday after a small trial of its experimental Alzheimer’s drug found that it slowed by about a third the rate of decline in a combined measure of cognition and function in patients at an early stage of the disease. (Additional reporting by Medha Singh, Devik Jain and Ambar Warrick in Bengaluru and Echo Wang in New York; Editing by Marguerita Choy)

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