Stocks declined Friday as President-elect Joe Biden unveiled a $1.9 trillion Covid-19 relief package, banks fell after kicking off earnings season 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 declined 1.1% and the Nasdaq was down 1.06%. Stocks tumbled in the last hour of trading Thursday. The Dow and Nasdaq had set intraday record highs during the session.
Biden’s “American Rescue Plan” includes $1,400 checks for individuals, on top of $600 provided in the last relief bill. Other elements of the plan include extending supplemental unemployment payments and a moratorium on evictions and foreclosures through September.
The president-elect’s plan also provides funds for vaccine deployment to help fight the coronavirus pandemic that as of Thursday has killed nearly 389,000 Americans.
The size of the aid package, as well as the potential for tax increases, has many on Wall Street concerned Biden may not win support in Congress for his proposals.
“To some extent, most of this optimism had been priced in, but the huge figures had also invited some contemplation as to whether the necessary bipartisan support will materialize for this huge sum,” said Jingyi Pan, a Singapore-based market strategist for IG.
JPMorgan Chase, the biggest U.S. bank, posted much stronger-than-expected fourth-quarter earnings as investment banking profit surged and the company booked a benefit of $1.9 billion from its earlier credit provisions.
“While positive vaccine and stimulus developments contributed to these reserve releases this quarter, our credit reserves of over $30 billion continue to reflect significant near-term economic uncertainty and will allow us to withstand an economic environment far worse than the current base forecasts by most economists,” CEO Jamie Dimon said in a statement.
U.S. retail sales weakened for a second consecutive month in December, the Commerce Department said Friday, as consumers pulled back on holiday spending amid expanded pandemic job losses.