Shares declined Friday as President-elect Joe Biden unveiled a $ 1.9 billion Covid-19 aid package. Banks fell after the earnings season kicked off and U.S. retail sales were worse than expected.
The Dow Jones industrial average fell 359 points, or 1.16%, to 30,632, the S&P 500 fell 1.1% and the Nasdaq 1.06%. Stocks tumbled in the last hour of trading on Thursday. The Dow and Nasdaq set intraday record highs during the session.
Biden’s ‘American rescue plan’ includes $ 1400 checks for individuals, in addition to the $ 600 provided in the last relief bill. Other elements of the plan include extending supplementary unemployment benefits and a moratorium on evictions and negatives until September.
The president-elect’s plan also provides funds for the deployment of vaccines to fight the coronavirus pandemic that killed nearly 389,000 Americans through Thursday.
The size of the aid package, as well as the potential for tax increases, has worried many people on Wall Street that Biden may not win support in Congress for his proposals.
“To some extent, most of this optimism has been gained, but the big numbers have also given some thought to whether the necessary dual support for this large amount will materialize,” said Jingyi Pan, a Singapore-based market strategist. for IG, said. .
Shares of JPMorgan Chase (JPM) – Get report, Wells Fargo (WFC) – Get report in Citigroup (C) – Get report fell Friday after major banks reported earnings in the fourth quarter.
JPMorgan Chase, the largest U.S. bank, had much stronger-than-expected earnings in the fourth quarter, as profits in investment banking services rose and the company recorded a $ 1.9 billion profit from its previous credit provision.
“While positive vaccine and stimulus developments this quarter contributed to this release of reserves, our credit reserves of more than $ 30 billion still reflect significant short-term economic uncertainty and will enable us to withstand an economic environment which is much worse than the current base forecasts by most economists. “” Jamie Dimon, CEO, said in a statement.
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U.S. retail sales weakened for a second consecutive month in December, the Department of Commerce said Friday when consumers returned to holiday spending amid widespread job losses.