*

Democrats propose a deal to end shutdown

*

Tesla shareholders approve $1 trillion CEO pay package

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Microchip Technology ( MCHP ) falls following its disappointing

sales

forecast

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Expedia ( EXPE ) jumps after annual revenue growth forecast hike

(Updates to market close)

By Stephen Culp

NEW YORK, Nov 7 (Reuters) - The Nasdaq closed lower on

Friday as investors turned the page on a roller-coaster week

with economic worries, the longest-ever federal government

shutdown, and sky-high tech stock valuations dampening risk

appetite.

But losses shrank significantly late in the session

following reports of progress on the congressional impasse which

has resulted in the longest federal government shutdown in U.S.

history.

"A resolution to the shutdown will clearly improve

sentiment, particularly at a time when the margin of error is

narrow," said Terry Sandven, chief equity strategist at U.S.

Bank Wealth Management in Minneapolis. "Stocks are at all-time

highs and valuations are elevated, and if the shutdown gets

resolved, it's one less thing weighing on the minds of

investors."

All three indexes lost ground from last Friday's close, with

the Nasdaq registering its largest weekly percentage drop since

late March amid mounting concerns over inflated valuations of

artificial intelligence-related momentum stocks, which have

provided much of the upside muscle to the stock market's rally

over recent months.

"Ups and downs and periods of consolidation are part of the

normal ebb and flow of a bull market," Sandven added.

Concerns arising from the government shutdown were

apparent in the University of Michigan's preliminary take on

November Consumer Sentiment, which fell to its lowest level in

over three years. Survey participants' assessment of current

conditions plunged to its most pessimistic reading in the

survey's history. Overall sentiment has slid 29.9% since

November 2024, when U.S. President Donald Trump was elected to

his second term in the Oval Office.

The shutdown has also led to a blackout of official economic

indicators, complicating the Federal Reserve's dual mandate of

promoting full employment and price stability.

"Flying in the dark in the absence of economic data due to

the shutdown is weighing on investors as well, adding a layer of

uncertainty," said Ryan Detrick, chief market strategist at

Carson Group in Omaha. "We know earnings were strong, but the

housing market is weak."

"Clearly the labor market is weakening and investors are

taking a 'sell first, ask questions later' mentality so far in

November."

On the trade front, Beijing has begun creating a new

rare earth licensing program that could speed up shipments but

is likely to fall short of Washington's hopes for a complete

rollback of restrictions.

According to preliminary data, the S&P 500

gained 8.52 points, or 0.13%, to end at 6,729.02 points,

while the Nasdaq Composite lost 47.87 points, or 0.21%,

to 23,006.12. The Dow Jones Industrial Average rose 76.28

points, or 0.16%, to 46,988.58.

Third-quarter reporting season continued to barrel toward

its conclusion, with 446 of the companies in the S&P 500 having

reported. Of those, 83% have delivered better-than-expected

earnings, according to LSEG data.

Analysts now predict year-on-year S&P 500 earnings growth of

16.8% for the July-September period, a significant improvement

over the 8.0% annual growth.

Microchip Technology ( MCHP ) shares dropped after

forecasting quarterly net sales below estimates.

Tesla shareholders approved the largest corporate

pay package in history for CEO Elon Musk. The electric vehicle

maker's shares lost ground.

Shares of Expedia ( EXPE ) surged after the travel platform

reported solid bookings from its business-to-business segment.

Block slumped after missing third-quarter profit

expectations, and Take-Two Interactive fell following

the company's decision to delay the launch of its popular video

game GTA VI to November 2026.