The Dow Jones Industrial Average erased earlier gains and turned negative on Thursday as hopes for further fiscal stimulus waned.
The 30-stock benchmark last traded down about 100 points after jumping 250 points earlier. The S&P 500 was flat, while the Nasdaq Composite outperformed, rising 0.9%.
The Dow turned red just as House Majority Leader Steny Hoyer’s office sent out a notice that the House was expected to vote on the Democrats’ stimulus bill Thursday. Traders were hoping lawmakers would keep delaying that vote in a sign that progress was being made with Republicans on a bipartisan package.
The market was supported by hopes that despite the public jockeying back and forth, lawmakers would eventually work a bill out. Tech shares, which could do well even without another stimulus, also gained, helping the S&P 500.
The House, which aimed to pass a $2.2 trillion Democratic bill Wednesday night, had delayed a vote to allow more time for House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin to hash out a bipartisan plan.
Pelosi and Mnuchin held a phone call Thursday after they failed to strike a deal during a Wednesday meeting.
“The two discussed further clarifications on amounts and language but distance on key areas remain. Their conversation will continue this afternoon,” a Pelosi spokesperson said.
Earlier Thursday, Pelosi said she is “hoping” the House will vote on its stimulus bill Thursday. While she acknowledged Democrats and Republicans are “way off” on issues including state and municipal aid, the speaker did not rule out the possibility of an agreement.
“We have always maintained a glimmer of hope – especially as we continue to believe there is majority support for a package in the $1.5-$2 trillion range,” wrote Ed Mills of Raymond James. “However, all of our conversations with our DC contacts remain skeptical.”
Major technology shares provided the broader market with some support as Amazon, Microsoft, Alphabet and Facebook all jumped at least 1%.
Mixed economic data also kept sentiment in check. U.S. manufacturing activity slowed in September as a purchasing manager’s index fell to a reading of 55.4 from 56 in August, according to the Institute for Supply Management.
The weekly jobless claims report came in better than expected, however. The Labor Department said first-time filers for unemployment benefits tallied 837,000 in the week ending Sept. 26. Economists polled by Dow Jones expected a total of 850,000.
The major averages are coming off their first down month since March. The 30-stock Dow lost 2.2% in September, a typically weak month for equities. The S&P 500 fell 3.9% for the month, while the technology-heavy Nasdaq Composite dropped 5.2%.
However, all three benchmarks achieved strong gains for the third quarter. The S&P 500 rose 8.5% in the quarter for its sixth positive quarter in seven and the index is up 5% for the year.
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