Asian markets pull back as hopes fade for U.S. stimulus – MarketWatch

Pedestrians cross a street during a rainy evening in Tokyo.

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TOKYO — Asian shares fell moderately Tuesday, echoing Wall Street’s decline as hopes faded Washington will come through with badly needed aid for the economy before the U.S. presidential election.

Market focus has been on the U.S. aid amid global uncertainty about the continuing economic damage from the coronavirus pandemic, which has slammed growth with social distancing restrictions, unemployment, crimped trade, as well as tourism and business closures.

Japan’s benchmark Nikkei 225 NIK, -0.44% declined 0.3% in morning trading while South Korea’s Kospi 180721, +0.49% slipped 0.2%. Australia’s S&P/ASX 200 XJO, -0.71% fell nearly 0.3%. Hong Kong’s Hang Seng HSI, +0.11% inched down less than 0.1%, while the Shanghai Composite SHCOMP, +0.46% slipped 0.3%. Benchmark indexes in Taiwan Y9999, -0.35%, Singapore STI, -0.58% and Indonesia JAKIDX, -0.51% fell.

“As hope for a pre-election stimulus balloon deflates, and with stocks struggling to float on their own during a subpar earning season, exhaustion set in, and the laws of gravity took over,” said Stephen Innes, chief global market strategist at Axi.

“And with no shortage of uncertainly overshadowing the markets, investors continue to tack cautiously ahead of the final presidential debate.”

Market players are looking for additional data on China’s recovery, as that could drive the sorely needed growth in the rest of Asia. Recent data out of Japan show exports to China have been recovering gradually.

On Wall Street, the S&P 500 dropped 1.6%, its worst day in more than three weeks. Wall Street is expecting lawmakers will agree on new stimulus measures for the economy, but the odds of that happening before Nov. 3 Election Day have dimmed.

The S&P 500 SPX, -1.63% fell 56.89 points to 3,426.92. The Dow Jones Industrial Average DJIA, -1.43% of big blue chips dropped 410.89 points, or 1.4%, to 28,195.42. The Nasdaq composite COMP, -1.65% extended its losing streak to a fifth day, losing 192.67 points, or 1.7%, to 11,478.88.

Stocks have been mostly pushing higher this month after giving back some of their big gains this year in a sudden September swoon. The benchmark S&P 500 has notched a gain in each of the past three weeks. Even so, trading often has been choppy from one day to the next, reflecting uncertainty over the timing of more stimulus for the economy.

Investors were also looking ahead to another busy week of corporate earnings reports. Across the S&P 500, analysts are expecting companies to report another drop in profits.

In energy trading, U.S. benchmark crude CLX20, -0.04% fell 26 cents to $40.57 a barrel. Brent crude BRNZ20, +0.11%, the international standard, lost 29 cents to $42.33 a barrel.

The U.S. dollar USDJPY, +0.13% inched up to 105.58 Japanese yen from 105.46 yen late Monday.

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