WASHINGTON Stocks fell sharply on Monday even after the Federal Reserve unveiled new measures to keep markets working properly. The major averages pared losses midday after Senate Minority Leader Chuck Schumer said he expects the Senate to on Monday reach a deal on a massive fiscal stimulus package. The Dow Jones Industrial Average traded 250 points lower, or 1.4%, after clinching its lowest level in three years earlier in the session. The S&P 500 slid about 1.3% while the Nasdaq Composite outperformed with a 0.5% gain. Wall Street’s bounce around noon came after Schumer, D-NY, said that Senate lawmakers are “very close to reaching a deal. Very close. And our goal is to reach a deal today,” Schumer said Monday. “And we’re hopeful, even confident that we will meet that goal.” The chamber appears to be in final discussions over a massive stimulus package after the bill failed a key procedural Senate vote Sunday as Democrats warned the measure did not do enough to help impacted workers and instead offered too much for company bailouts. But the tone on Capitol Hill and the White House turned more optimistic Monday morning after Treasury Secretary Steven Mnuchin told CNBC’s Jim Cramer that Congress was “very close” to getting a fiscal package done, noting it must be pushed forward “today.” “We’re using some of the funds we have, but we need Congress to approve additional funds today so that we can move forward and support American workers and the American economy,” Mnuchin said. One of the measures taken by the Fed was an open-ended asset purchase program, which the central bank will run in the “amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.” “While the Fed’s actions are an enormous help, the only way the markets are going to find sustainable improvement is when the economy is allowed to come back to life, or at least there is a real path in place for how that is going to happen,” said Paul Hickey of Bespoke Investment Group, in a note.—Agencies
