Poor Indicators and Earnings Decline... New York Stock Market Closes Lower (Comprehensive)

Market Pressure Amid Potential Difficulties in Stimulus Bill Negotiations

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market closed lower due to concerns over the failure of negotiations on the economic stimulus bill and the impact of weak economic indicators and corporate earnings.

On the 28th (local time), the Dow Jones Industrial Average fell 205.49 points (0.77%) to close at 26,379.28, the S&P 500 index dropped 20.97 points (0.65%) to 3,218.44, and the Nasdaq index declined 134.18 points (1.27%) to 10,402.09.

Although the Republican Party announced a $1 trillion stimulus package the previous day, they stated that the expansion of unemployment benefits would be reduced to $200 per week, casting doubt on reaching an agreement with the Democratic Party, which pressured the market.

Major corporate earnings announced that day were generally weak. Both the hamburger chain McDonald's and mask manufacturer 3M reported results below expectations. Pfizer, a COVID-19 vaccine developer, also saw a decline in earnings but exceeded forecasts, leading to a rise in its stock price.

Economic indicators were also weak. The Conference Board's Consumer Confidence Index for July was 92.6, showing a sharp decline compared to 98.3 in the previous month. This suggests growing caution about consumption, which accounts for two-thirds of the U.S. economy, amid the resurgence of COVID-19.

The Federal Reserve's (Fed) response is also drawing attention. The Fed is holding a two-day Federal Open Market Committee (FOMC) meeting starting that day, and the market is focusing on whether additional measures will be announced. The Fed also announced that it would extend the operation period of various emergency lending programs, including the Main Street Lending Program, originally scheduled to end in late September, by three months until the end of December.

August delivery gold closed at $1,944.60 per ounce, up 0.7% ($13.60) from the previous day. West Texas Intermediate (WTI) crude oil closed down 1.4% ($0.56) at $41.04 per barrel.

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