Tech gains but Dow falls as Wall Street accepts stimulus fate

Democrats and Republicans in Washington are in the final two weeks of negotiations before the November 3 presidential election on new spending measures to boost the US economy after the coronavirus pandemic caused grievous damage earlier in the year.
Democrats and Republicans in Washington are in the final two weeks of negotiations before the November 3 presidential election on new spending measures to boost the US economy after the coronavirus pandemic caused grievous damage earlier in the year.
Bloomberg Creative

Tech stocks climbed in opening US trading on Tuesday but the Dow struggled to find traction as it became clear a new stimulus package from Congress was not going to happen.

About 30 minutes after the opening bell, the benchmark Dow Jones Industrial Average was down 0.1% at 27 646.50.

The broad-based S&P 500 climbed 0.1% to 3 404.93, however the tech-rich Nasdaq increased 0.6% to 11 425.03.

Traders had bet for months that Congress would come to an agreement on another massive spending package to aid the economy as it struggles to recover from the coronavirus pandemic.

But downbeat comments from lawmakers in recent days indicate that probably won't happen before the November 3 election, and Wall Street saw its worst one-day slump since September in Monday trading.

"Stimulus talks have not produced an agreement (and likely won't before the election now that the Senate has adjourned), and the election uncertainty is still there, which will be the case at least until November 3 and perhaps for some time thereafter," analysts at Briefing.com wrote.

Traders were also digesting a slew of third-quarter earnings reports as well as news of a major tie-up.

Advance Micro Devices announced before markets opened that it had struck a deal to buy computer chipmaking rival Xilinix in a $35 billion megadeal that consolidates the sector.

The acquisition will help AMD ramp up its challenge to Intel for personal computer chips, and broaden its portfolio to products for data centers, industrial systems and other sectors.

AMD shares were down 3.8% after reporting its third-quarter profit more than tripled from a year ago to $390 million as revenue grew 56% to $2.8 billion.

Xilinx was up 8.9%.

3M fell 2.2% after it reported third quarter earnings that had fallen overall despite support from strong demand for protective masks to counter the pandemic.

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