Wall Street set to drop as stimulus doubts resurface

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(Reuters) – Wall Street was set to tumble on Friday as delays over a new fiscal stimulus package and surging coronavirus infections dented sentiment even as regulators moved toward emergency use authorization of a COVID-19 vaccine.

With fresh business restrictions in many U.S. states and a jump in weekly jobless claims, investors are counting on more fiscal relief to sustain a nascent economic recovery.

But an agreement remains elusive and House Speaker Nancy Pelosi on Thursday raised the possibility of negotiations dragging on through Christmas.

“Investors are wondering what is it that Congress needs to hear before they decide to act … their focus is more on politics than it is on the American economy,” said CFRA Chief Investment Strategist Sam Stovall.

“The economy is not getting stronger and it needs at least a short-term shot in the arm.”

Cyclical stocks, which stand to benefit from an economic recovery, led declines in premarket trading on Friday, with energy, industrial and financial sectors all lower.

Major banks Wells Fargo (NYSE:WFC) & Co and JPMorgan Chase & Co (NYSE:JPM) slid about 1% each, while industrial bellwethers Boeing (NYSE:BA) Co and 3M Co fell 0.4% and 0.6%, respectively.

Walt Disney (NYSE:DIS) Co bucked the broader gloom and jumped 8%, as it announced a heavy slate of new shows for its streaming services, including Marvel and Star Wars series on its fast-growing Disney+ platform.

Shares of rival streaming platform Netflix Inc (NASDAQ:NFLX) dropped about 1%, more than the rest of the core FAANG stocks such as Amazon.com Inc (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL).

The benchmark S&P 500 and the blue-chip Dow were set to snap a two-week winning streak as volatility jumped to its highest in almost a month.

At 08:05 a.m. ET, Dow E-minis were down 178 points, or 0.59%. S&P 500 E-minis were down 24.75 points, or 0.67%. Nasdaq 100 E-minis were down 80.75 points, or 0.66%.

Global stock markets were also subdued after scaling record highs earlier this week as the UK became the first country in the world to begin a mass COVID-19 vaccination program. [MKTS/GLOB]

The U.S. Food and Drug Administration said on Friday it was working rapidly to issue an emergency use authorization for Pfizer Inc (NYSE:PFE)’s COVID-19 vaccine, with the first Americans set to be immunized as early as Monday or Tuesday.

The U.S. drugmaker’s shares climbed 1.7%.

Qualcomm (NASDAQ:QCOM) Inc fell 3.8%, following a Bloomberg News report that Apple has started building its own cellular modem for future devices, a move that would replace components from the chipmaker.

Mastercard Inc (NYSE:MA) dropped 1.7% after the UK Supreme Court gave the green light for an $18.5 billion class action against the company for allegedly overcharging more than 46 million people in Britain over a 15-year period.

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