NEW YORK: Wall Street stocks were mixed at the end of Monday's (May 22) session ahead of White House negotiations with Republican leaders to avert a US debt default.
After a weekend of near deadlock, President Joe Biden arrived back in Washington late Sunday, ahead of the US Treasury's June 1 deadline for Congress to authorise more borrowing.
Talks were to resume on Monday night.
“The base case is still for a debt deal to be reached, but the risk of a default is still on the table,” said market Oanda Edward Moya, adding that such an outcome would mean “an immediate plunge towards bear market territory.”
The Dow Jones Industrial Average finished down 0.4% at 33,286.58.
The broad-based S&P 500 was flat at 4,192.66, while the tech-rich Nasdaq Composite Index gained 0.5% to 12,720.78.
“Investors are basically saying, ‘We’re giving at least a 60:40 likelihood that they will come to an agreement in time’,” said Sam Stovall, chief investment strategist at CFRA Research.
“An agreement could simply be the extension, kicking it down the road to decide on a debt ceiling when they also discuss the budgets in September.”
Amid the debt talks, US central bank policy remained in focus.
Minneapolis Federal Reserve president Neel Kashkari told CNBC that it is a “close call” on whether the central bank should again lift interest rates in June, but added that such a move would not guarantee an end to the Fed’s tightening cycle.
Chevron fell 1.8% after announcing it will acquire PDC Energy for US$6.3 billion, bolstering its holdings in US properties in Colorado and the Permian Basin, an area in Texas and New Mexico. PDC gained 7.2%.
JetBlue dropped 2.1% and American Airlines lost 3% after a federal judge ruled on Friday that the companies’ alliance for service in the Northeastern region must end due to competition concerns.
Regional banks, which endured deep losses earlier in the spring, had a winning session. Comerica rose 3.5%, KeyCorp 4.6% and Western Alliance Bancorporation 10.3%. – AFP, Reuters
