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U.S. Stocks Close Modestly Lower Following Lackluster Session

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After ending the previous session modestly higher, stocks showed a lack of direction over the course of the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session moderately lower. The Dow fell 97.97 points or 0.4 percent to 28,210.82, the Nasdaq dipped 31.80 points or 0.3 percent to 11,484.69 and the S&P 500 edged down 7.56 points or 0.2 percent to 3,435.56.

The choppy trading on Wall Street came as traders kept an eye on the latest developments in Washington, as lawmakers try to reach an agreement on a new stimulus bill.

White House chief of staff Mark Meadows told CNBC on Tuesday that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have made "good progress" in talks but noted they "still have a ways to go" before an agreement is reached.

Pelosi and Mnuchin are expected to talk again today as they seek to reach an agreement on a new relief package before next month's elections.

In a post on Twitter, Pelosi's deputy chief of staff Drew Hammill said the Speaker and the Secretary have called for committee chairs to work to resolve differences about funding levels and language.

"With this guidance, the two principals will continue their discussions tomorrow afternoon upon the Secretary's return," Hammill tweeted.

However, Senate Majority Leader Mitch McConnell revealed on Tuesday that he has warned the White House not to make a deal with Pelosi before the elections.

Federal Reserve Governor Lael Brainard urged Congress to pass a new relief bill in a speech at an online conference hosted by the Society of Professional Economists.

"The recovery remains highly uncertain and highly uneven — with certain sectors and groups experiencing substantial hardship. These disparities risk holding back the recovery," Brainard said.

She added, "Further targeted fiscal support will be needed alongside accommodative monetary policy to turn this K-shaped recovery into a broad-based and inclusive recovery."

Sector News

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Housing stocks showed a significant move to the downside, however, with the Philadelphia Housing Sector Index tumbling by 2.6 percent.

Considerable weakness was also visible among oil stocks, as reflected by the 2 percent drop by the NYSE Arca Oil Index. The weakness in the sector came as the price of crude oil for December delivery slumped $1.67 to $40.03 a barrel.

Biotechnology, natural gas and airline stocks also saw notable weakness on the day, while gold stocks moved higher along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.3 percent, while China's Shanghai Composite Index edged down by 0.1 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index tumbled by 1.9 percent, the French CAC 40 Index and the German DAX Index slumped by 1.5 percent and 1.4 percent, respectively.

In the bond market, treasuries moved modestly lower, extending the downward trend seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.9 basis points to a four-month closing low high of 0.816 percent.

Looking Ahead

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims, existing home sales and leading economic indicators.

On the earnings front, Chipotle Mexican Grill (CMG), Equifax (EFX), Tesla (TSLA), and Whirlpool (WHR) are among the companies releasing their quarterly results after the close of today's trading.

AT&T (T), Coca-Cola (KO), M&T Bank (MTB), PulteGroup (PHM), and Southwest Airlines (LUV) are also among the companies due to report their results before the start of trading on Thursday.

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