Dow poised to skid 200 point amid setbacks on U.S. fiscal relief package and Brexit

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U.S. stock indexes were indicated lower on Friday, wrapping up a week that has been focused on uncertain progress toward another coronavirus relief package by Congress and thus far unsuccessful negotiations on Britain’s trade relationship with the European Union.

Hand-wringing about overly bullish sentiment and lofty valuations despite progress on a coronavirus vaccine rollout has also unsettled investors after the stock indexes hit new highs earlier in the week.

Futures for the Dow Jones Industrial Average were trading 223 points, or 0.7%, lower at 29,689; those for the S&P 500 index were retreating 31.30 points to reach 3,629.50, a drop of 0.9%; Nasdaq-100 futures were trading 103.50 points, or 0.8%, lower at 12,297.25.

On Thursday, markets ended mixed with the Nasdaq Composite finishing higher:

The Dow closed down 69.55 points, or 0.23%, to 29,999.26.

The S&P 500 index down 4.72 points, or 0.13%, to 3,668.10.

The Nasdaq Composite Index rose 66.85 points, or 0.54%, to 12,405.81.

For the week, the Dow is on track for a weekly decline of 0.7%, the S&P 500 index is headed for a 0.8% decline, while Nasdaq Composite was set for a 0.5% skid.

Wall Street is contending with a series of potentially disappointing outcomes that disrupt the bullish mood on Wall Street.

A bipartisan $908 billion pandemic relief package in Washington continued to show signs of a struggle and its status appears increasingly uncertain, even as weekly economic data showed a sharp rise in jobless benefit claims, likely due to an uncontrolled second wave of the COVID-19 pandemic in the U.S.

In the fiscal relief talks, Senate Republican leaders are pushing for a narrower coronavirus relief bill, highlighting an inability to overcome differences centered on state and local aid, and liability protection for businesses.

On top of that, U.K. Prime Minister Boris Johnson said the country needs to brace for the likelihood that a post-Brexit trade deal with the European Union won’t happen. European Commission President Ursula von der Leyen cautioned Friday that “positions remain apart on fundamental issues.”

“This might just be talk, as a way of trying to put pressure on the UK but nonetheless, traders have reacted by dropping stocks,” wrote David Madden, market analyst at CMC Markets UK, in a research note.

A deal must be struck before the end of 2020 otherwise the U.K.’s current commercial and trading ties with the EU expire on Jan 1 without an agreement in place, an outcome that could roil global markets anew.

Meanwhile, the U.S. Food and Drug Administration said that it plans to complete and issue an emergency use authorization to BioNTech and Pfizer Inc.’s experimental COVID-19 vaccine, after an advisory panel recommended its approval on Thursday.

Still, cases and deaths from the deadly pathogen have been on the rise, with the U.S. averaging 211,127 cases a day, in the past week. There was a record of 107,258 COVID-19 patients in U.S. hospitals on Thursday, according to the COVID Tracking Project, topping the record of 106,705 set a day earlier.

Other countries have seen some vaccine setbacks though. Sanofi SA said Friday that the vaccine program it is developing with British pharmaceutical giant GlaxoSmithKline PLC has experienced a delay, and the Associated Press reported that Australia was abandoning a plan for a COVID-19 vaccine from biopharmaceutical company CSL  after false positive results to HIV tests.

Stocks in Europe failed to get any lift from Thursday’s news that the European Central Bank expanded and extended its asset-buying program as the eurozone deals with the COVID-19 pandemic.

In U.S. economic reports, investors are awaiting a reading on inflation, including the producer-price index at 8:30 a.m. Eastern and a consumer sentiment report at 10 a.m.

Pfizer Inc. said Friday’s its board has raised its quarterly cash dividend to 39 cents a share from 38 cents in the year-earlier period. The new dividend will be payable March 5 to shareholders of record as of Jan. 29.

Airbnb Inc. shares were still in focus after the home rental company surged in its initial public offering.

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