Stocks are closing lower on Wall Street as optimism fades that Washington will deliver more badly needed aid for the economy before the election next month. The benchmark S&P 500 index fell 1.6% after starting the day higher. Investors are also preparing for a busy week of corporate earnings. Procter & Gamble, Netflix and IBM are among the companies that will report how they did over the summer, when the virus lockdowns were in full swing. Stocks had been up in the early going following a report that China’s economy grew at a 5% annual rate in the last quarter.

THIS IS A BREAKING NEWS UPDATE: AP’s earlier story appears below.

Stocks are down on Wall Street in afternoon trading Monday, giving up some of their recent gains, as optimism that Washington will deliver more aid for the economy before Election Day fades.

The S&P 500 was down 1.6% after shedding an early gain that followed a report that China’s economy grew at a 5% annual rate in the last quarter. The market slide was broad, though technology, health care and communication stocks bore the brunt of the selling.

Treasury yields were mixed.

Investors remain focused on the potential for new stimulus measures for the economy, but hopes for agreeing on a new package before the Nov. 3 election are dimming. Meanwhile, the coronavirus remains a concern and the election will likely make for a volatile few weeks.

“We’re in a period here in the the next couple of weeks where the market goes sideways through the election,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

The Dow Jones Industrial Average of big blue chips was down 426 points, or 1.5%, to 28,173 as of 3:02 p.m.

Eastern time. The Nasdaq composite fell 1.6%.

Small company stocks were holding up better than the rest of the market. The Russell 2000 was down 0.7%. The index has gained 7.9% so far this month, outpacing the 1.9% gain for the broader S&P 500.

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, something investors have been hoping for since July, when a supplemental $600-a-week unemployment benefit package ran out.

Senate Majority Leader Mitch McConnell is expected to bring a his version of a stimulus bill to the floor of the Senate for a vote on Wednesday. However that bill is likely to get zero traction with the Democrat-controlled House of Representatives.

House Speaker Nancy Pelosi, her Senate Republican rivals and President Donald Trump are not on the same page, Pelosi said Sunday that a deal would have to come within 48 hours — or Tuesday — for it to be enacted by Election Day.

Investors were also looking ahead to another busy week of corporate earnings reports. Procter & Gamble, Netflix and IBM are a few of the companies that will reveal the extent of the virus pandemic’s impact during the most recent quarter.

Across the S&P 500, analysts are expecting companies to report another drop in profits for the summer from year-ago levels. But they’re forecasting the decline to moderate from the nearly 32% plunge from the spring as the economy has shown signs of improvement.

AMC Entertainment jumped 15.5% after the movie theater chain said it plans to resume operations in theaters in New York State later this week.

ConocoPhillips fell 2.2% after the oil giant announced it would buy Concho Resources for $9.7 billion. The deal is the largest in the oil industry since crude prices plummeted this year due to the COVID pandemic. Concho was down 1.6%.

European stocks closed broadly lower. The German DAX lost 0.4%, France’s CAC 40 slipped 0.1% and the FTSE 100 in London lost 0.6%.

Stocks in Asia ended mixed, though Hong Kong’s Hang Seng climbed 0.6% following the encouraging report on the Chinese economy.

China was the first country to suffer coronavirus outbreaks and the first major economy to emerge from the pandemic and begin reopening from shutdowns.

That’s providing a boost to other countries like the U.S. and Japan that rely on trade with China. After contracting 6.8% in the first quarter of this year the Chinese economy grew 3.2% in the April-June quarter and 4.9% in July-September.