NEW YORK (AFP) – Major Wall Street indices drew back from record territory on Wednesday (Oct 27), as enthusiasm over good earnings numbers was overcome by the grinding politics of Washington.

The Dow and S&P 500 had started the day’s trading with modest gains after their record-setting finishes on Tuesday, but slumped by the close as Democratic lawmakers in Congress appeared to make little progress on a long-awaited social spending package.

FHN Financial economist Chris Low said despite fears the potential of US$2 trillion (S$2.6 trillion) in spending under the plan could fuel more price increases, stock markets may view the package as necessary for the health of the wider economy.

“I could see from a stock standpoint, inflation is not the enemy. Growth is necessary,” he said.

The benchmark Dow Jones Industrial Average dropped 0.7 per cent to 35,490.69 at the close. The broad-based S&P 500 lost 0.5 per cent to finish at 4,551.68.

The tech-rich Nasdaq Composite Index was flat at 15,235.84.

Traders also were eyeing corporate earnings, which have provided a mixed view on the health of major corporations as they bounce back from the pandemic.

Coca-Cola climbed 1.9 per cent after reporting higher profits in the latest quarter and signaling that it expects improved earnings for the year as soft drink consumption improves worldwide.

Boeing closed down 1.5 per cent after reporting a quarterly loss in a setback to its recovery from recent stumbles, citing ongoing troubles with the 787 aircraft.

After GM said its third-quarter profits sunk as did car sales due to the global semiconductor crunch the automaker predicted would persist into 2022, its shares finished 5.4 per cent lower.

Google, which reported a big profit jump after markets closed Tuesday, finished up 5 per cent.