Dow Futures Are Softer Amid a Fed and Treasury Clash

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Stocks were lower Friday morning, on pace to end the week down a touch, as Covid-19 cases surge, states shut down, and the threat of expiration of Federal Reserve credit facilities looms.

Shortly after the open, the

Dow Jones Industrial Average

fell 49 points, or 0.2%, while the

S&P 500

fell 0.1%. The tech-heavy

Nasdaq Composite

slipped 0.2%.

The

Stoxx Europe 600 index

rose 0.3%, while Asian equities finished mostly higher, apart from a drop for the

Nikkei 225 index.

Treasury Secretary Steven Mnuchin on Thursday declined to extend emergency loan programs that were set up with the Fed and due to expire at the end of the year. He also asked the central bank to return the unused funds to the Treasury to “allow Congress to reappropriate $455 billion,” he wrote.

Voicing its objection in a statement that followed, the Fed said it would prefer that “the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”

The expiration of five loan facilities, including one that aids small businesses, comes as the nation’s coronavirus infections spiral out of control and states begin to restrict movement. California imposed a 10 p.m. curfew for nearly all residents, while the Centers for Disease Control and Prevention has advised against Thanksgiving travel for the U.S. holiday next Thursday.

“While there are some glimmers of hope for a new fiscal package in the new year, any discord between the two bodies threatens to rattle investor sentiment, where continued monetary and fiscal support has been seen as a given throughout the health crisis,” said Richard Hunter, head of markets at Interactive Investor, to clients in a note.

New virus cases in the U.S. have hit 187,000 in a day, according to Johns Hopkins data. Several states are imposing restrictions, raising the prospect of economic damage, but investors also know that including

Moderna’s

(ticker: MRNA) and

Pfizer’s

(PFE) efforts, the world may see more than 2 billion vaccine doses by the end of 2021.

Pfizer and

BioNTech

(BNTX) will submit a request for Emergency Use Authorization for their vaccine today, another bit of positive news investors had anticipated.

Meanwhile, in Europe, European Commission President Ursula von der Leyen said on Thursday the Pfizer/BioNTech and Moderna’s Covid-19 vaccine treatments could receive conditional marketing authorization by mid December.

The 10-year Treasury yield was flat at 0.84%, but it has fallen from the 0.96% hit on Nov. 10 as investors have gotten jittery about the near term.

Here are some of the biggest move by individual stocks:

Pfizer and BioNTech shares rose 2.1% and 7.2%, respectively.

Foot Locker

(FL) rose 2.8% after the company reported higher sales and earnings than expected. Earnings per share were $1.21, nearly double the 63 cents Wall Street expected. Revenue was $1.96 billion, while analysts had expected $1.94 billion.

United Rentals

(URI) rose 2.9% after Bank of America upgraded the stock to Buy from Neutral.

FireEye

(FEYE) rose 9.4% in response to news it is buying Respond Software for $186 million.

Write to Barbara Kollmeyer at [email protected] and Jacob Sonenshine at [email protected]