By Yasin Ebrahim
Investing.com – The Dow closed lower on Friday as investors weighed the progress of stimulus talks and the added election uncertainty after President Donald Trump tested positive for Covid-19.
The Dow Jones Industrial Average fell 0.48%, or 134 points, but snapped its four-week losing streak. The S&P 500 fell 0.95% while the Nasdaq Composite slipped 2.22%.
House Speaker Nancy Pelosi signaled that an agreement on aid for airlines was nearing the finish line. The house speaker had urged carriers including American Airlines and United Airlines to delay cutting tens of thousands of jobs as the industry has suffered from weaker travel demand owing to the coronavirus pandemic.
Airlines climbed on the news, lifting industrials higher, with Delta Air Lines (NYSE:DAL) and United Airlines (NASDAQ:UAL), and American Airlines (NASDAQ:AAL) climbed, the latter rising more than 3%.
Hopes for a broader stimulus package were also boosted following a Washington Post report suggesting U.S. Treasury Secretary Steven Mnuchin and Pelosi had made progress on talks, which are set to continue into the weekend.
"Two people who have spoken with senior administration officials in recent weeks, granted anonymity to share details of private conversations, said the White House is pushing harder for a deal in part because Trump trails in the polls" the Washington Post reported.
The progress on stimulus slightly eased worries over election uncertainty after President Trump confirmed he and his wife had tested positive for the coronavirus and would isolate themselves.
“A positive test result for the President is also a reminder to the market that the virus is far from contained and remains the biggest risk to the economy, the outlook, policy and the election itself,” Stifel said in a note.
The diagnosis comes as fears over the slowing pace of the economic recovery continue after the U.S. created fewer jobs than expected last month, with economists warning of further pain ahead.
The U.S. economy created 661,00 jobs last month, missing economists forecasts of 850,000, while the unemployment rate ticked lower to 7.9%, which beat the consensus of 8.2%.
“Payroll growth is clearly slowing, and the trend is likely to continue. At the start of the recovery, there were 18mln people on temporary layoffs and many of those jobs returned quickly as the economy reopened,” Jefferies (NYSE:JEF) said. Today, there are only 4.6 million left, while the ranks of permanently laid-off workers have swelled to 3.7 million. “This suggests the economy is running out of 'low hanging fruit' and sustaining the recent growth will be difficult.”
Tech, however, kept gains in the broader market in check, with Apple (NASDAQ:AAPL) Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB) and Alphabet Inc Class A (NASDAQ:GOOGL) falling more than 2%.
In other news, Peloton Interactive (NASDAQ:PTON) closed more than 2% higher after reporting that its subscribers have doubled during the second quarter to over 1 million.
Tesla (NASDAQ:TSLA), meanwhile, reported third-quarter deliveries of 139,300 vehicles, which was ahead of the 137,000, but its shares fell 7%.