U.S. stocks fall as Waller news weighs; Apple adds to gains
(Adds closing prices, quotes, detail)
* Investors react to Fed funding expiries, rising infections
* Some say Fed money might go into early stimulus
* Flows into equities show broader investment options
*
By Alwyn Scott
NEW YORK, Nov 20 (Reuters) - Stock prices and bond yields
fell in relatively light trading on Friday as investors reacted
to dwindling aid for the U.S. economy and rising coronavirus
infection rates.
The Dow Jones Industrial Average .DJI fell 219.75 points,
or 0.75%, to 29,263.48, the S&P 500 .SPX lost 24.33 points, or
0.68%, to 3,557.54 and the Nasdaq Composite .IXIC dropped
49.74 points, or 0.42%, to 11,854.97.
The S&P 500 and the Dow posted marginal losses for the week,
while the tech-laden Nasdaq settled a bit higher from last
Friday's close.
Benchmark 10-year Treasuries yields US10YT=RR fell to an
11-day low of 0.818%, before bouncing back to 0.829%. The yields
are down from an eight-month high of 0.975% last week, when
supply and optimism over vaccines pushed the rates higher, and
have now retraced almost all of that spike.
In afternoon trading, the dollar was flat against a currency
basket at 92.369 in a quiet day for currency markets. The euro
was down 0.1% against the dollar at $1.1859 EUR=EBS , posting a
small weekly gain.
Investors mostly sat pat on positions after recognizing that
a wind-down of U.S. Federal Reserve pandemic lending programs
was unlikely to have much effect, said David Bahnsen, chief
investment officer, the Bahnsen Group, a wealth management firm
in Newport Beach, California.
"It would be virtually incomprehensible that any market
actor could have actually thought that extension of the
emergency provisions of the Fed was needed," Bahnsen said.
Much of the money has not even been used, he added.
Mnuchen defended the decision to let the programs expire at
year end and noted the Treasury could reactivate them. "We have
plenty of capacity left," he said. FACTBOX-This is where the Fed's emergency facilities stand.
Mnuchen's comments that remaining money could be used for
grants rather than loans suggested that "this could be an avenue
to a targeted fiscal stimulus deal in the lame duck session,"
said Yousef Abbasi, global market strategist at StoneX, a global
financial services firm.
Investors remain worried about the economic cost of rising
infections and new lockdowns and restrictions, which grew
Friday. White House Coronavirus Task Force coordinator Deborah
Birx on Friday said more than half the United States was a
virus-rampant "red zone," and Americans should limit gatherings
on Thanksgiving Day to immediate family members. But investors also are moving beyond the safety of big tech
stocks to small cap and even emerging markets as they anticipate
improving economies next year, Bahnsen said.
A weakening dollar, strengthening global manufacturing and
emerging markets stocks that are less expensive than American
equities "really broaden that investing universe," he said. "I
think that's healthy for investors."
Indeed, optimism about coronavirus vaccines prompted
investors to pump $27 billion into equity funds last week, BofA
said on Friday, citing data from EPFR
Still, despite buying of hard-hit sectors such as banks,
travel and leisure and oil, BofA said, investors "ain't selling
tech."
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