[News] Hope fades for new stimulus package, dashing market gains, but Disney got some good news

[_Happy boy]

The S&P 500 gave up most of its early-week gains at the end of the week as hopes for a major U.S. economic stimulus package before the election faded.

On Thursday, Treasury Secretary Steven Mnuchin said he and House Speaker Nancy Pelosi had been making progress in negotiations for a bipartisan stimulus package but suggested a finalized deal is unlikely to happen prior to the November elections. House Democrats had already passed a $2.2 trillion stimulus package, and President Donald Trump said Thursday he would be willing to raise his stimulus package offer to above $1.8 billion.

Disney shares jumped  after the company announced it’s restructuring its media and entertainment businesses to focus primarily on its Disney+ streaming service. The move comes after the global coronavirus pandemic devastated the company’s theatrical, theme park and cruise businesses this year. Earlier this month, activist investor Dan Loeb called on Disney to eliminate its $3 billion annual dividend to help fund heavier investment into streaming content.

 

Investors got some bad news on the COVID-19 treatment front. Eli Lilly was forced to pause testing of its monoclonal antibody coronavirus treatment because of safety concerns, and Johnson & Johnson halted its late-stage coronavirus vaccine trial because of an “adverse event” involving a study participant.

More:Stocks start month strong but Q3 earnings, stimulus talks could change things

More:Stock market's volatile month weighed down by layoffs, no stimulus

Apple unveiled four new iPhone 12 models at a special event on Tuesday, all of which are compatible with 5G wireless networks.

Bank earnings disappoint
Wells Fargo was the biggest loser during a lackluster week for the banks. The bank’s earnings were seen as disappointing, and the firm reported a 19% drop in net interest income — a key metric of profitability. Wells Fargo also laid off more than 100 employees who fraudulently applied for federal small business pandemic relief aid.

While most of the big banks reported earnings surprises and a lowering of loan loss provisions, investors remain skeptical. Shares of Wells Fargo, JPMorgan, Bank of America, and Citigroup are all flat to down for the week. That weak performance is still justified, according to TD Ameritrade Manager of Trader Strategy Shawn Cruz.

“I was looking for bigger signs of problems on their loan books and that didn't show up yet,” said Cruz. “But I still think it’s out there down the road, in terms of businesses not being able to pay their loans.”

This week, investors will be watching for earnings reports from Procter & Gamble and Netflix on Tuesday, Verizon on Wednesday and AT&T on Thursday.

Global numbers to watch for
Investors will get key global economic updates when European Central Bank President Christine Lagarde gives a speech at the IMF/World Bank Annual Meetings on Sunday and  when the People’s Bank of China announces its latest interest rate decision on Tuesday.

Benzinga is a financial news and data company headquartered in Detroit.