Tech Selloff Sinks Stocks Amid Stimulus Deadlock: Markets Wrap

(Bloomberg) -- A selloff in some of the world’s biggest technology companies weighed heavily on the equity market, dragging down stocks amid dimming prospects for fresh stimulus.

The S&P 500 slid from a record, while the Nasdaq 100 had its biggest slump in a month. Facebook Inc. sank after being sued by U.S. antitrust officials, while Tesla Inc. tumbled as JPMorgan Chase & Co. called it “dramatically” overvalued. Zoom Video Communications Inc., one of the biggest stay-at-home winners, plunged after an analyst downgrade. The Russell 2000 index of smaller companies was down half as much as the tech-heavy gauge. DoorDash Inc. defied the market weakness -- almost doubling in its debut -- before Airbnb Inc.’s initial public offering.

Stocks took a nosedive Wednesday as it became clear that a stimulus deal remains elusive amid the most-intense negotiations over a Covid-19 package since Election Day. The Democratic and Republican lawmakers working on a relief plan delivered a more-detailed summary of their proposal, but haven’t yet resolved the deadlock over a business liability shield as well as aid to state and local governments.

“To the extent they can’t come to an agreement on stimulus given the heightened urgency, given the recent outbreak, that’s a bad message,” said Mark Heppenstall, chief investment officer for Penn Mutual Asset Management. “I do think stimulus is coming and I think the market was more prepared for it to be this year than next year.

Here are some key events coming up:

• Thursday brings the European Central Bank policy decision and a press briefing from Christine Lagarde. Economists widely expect the central bank to increase and extend its pandemic bond-buying program.
• The FDA meets to discuss the vaccine made by Pfizer/BioNTech on Thursday.
• Jobless claims data are due in the U.S. on Thursday.

These are some of the main moves in markets:

Stocks

• The S&P 500 declined 0.8% as of 4 p.m. New York time.
• The Stoxx Europe 600 Index advanced 0.3%.
• The MSCI Asia Pacific Index climbed 0.5%.

Currencies

• The Bloomberg Dollar Spot Index increased 0.1%.
• The euro dipped 0.2% to $1.2082.
• The British pound gained 0.3% to $1.3401.
• The Japanese yen was little changed at 104.21 per dollar.

Bonds

• The yield on 10-year Treasuries increased two basis points to 0.93%.
• Germany’s 10-year yield rose less than one basis point to -0.61%.
• Britain’s 10-year yield climbed less than one basis point to 0.261%.

Commodities

• West Texas Intermediate crude was little changed at $45.57 a barrel.
• Gold fell 1.6% to $1,840.07 an ounce.

©2020 Bloomberg L.P.