Stocks were slightly lower Tuesday as investors focused on talks between Republicans and Democrats on a second coronavirus aid package and a deluge of second-quarter corporate results.
What are major indexes doing?
The Dow Jones Industrial Average DJIA,
The Dow on Monday finished with a gain of 114.88 points, or 0.4%, at 26,584.77, while the S&P 500 gained 23.78 point, or 0.74%, to close at 3,239.41. The Nasdaq Composite advanced 173.09 points to end at 10,536.27, a 1.7% gain.
What’s driving the market?
Senate Republicans on Monday unveiled a roughly $ 1 trillion coronavirus relief package, kicking off negotiations with Democrats over a package with some data suggesting the U.S. economic recovery is stalling.
A fight looms over supplemental unemployment benefits, with Democrats eager to maintain the existing $ 600 weekly supplement, while the Republican plan would reduce it to a $ 200 add-on through September. The supplemental jobless benefits are due to expire at the end of the month. Democrats and Republicans also want to issue another round of stimulus checks, but disagree on the details.
Analysts said the added jobless benefits have been credited with helping to cushion the economic blow of the COVID-19 pandemic.
“In our view, for equities to continue yesterday’s rebound, a common ground should be found before Friday when the enhanced unemployment benefits expire,” said Charalambos Pissouros, senior market analyst at JFD Group. Pissouros said a package near $ 1 trillion or lower would likely come as a disappointment to the market.
Meanwhile, the number of U.S. cases rose to 4.29 million and the death toll hit 148,056. Texas became the fourth state with more than 400,000 cases, joining California, Florida and New York. The global tally for confirmed cases of COVID-19 climbed to 16.5 million on Tuesday, according to data aggregated by Johns Hopkins University, while the death toll rose to 654,327.
On the vaccine front, Moderna Inc. MRNA,
Earnings reports rolled in from a number of high-profile companies, including Dow components 3M Co. MMM,
The Federal Reserve was set to begin a two-day policy meeting Tuesday that’s unlikely to result in much action, but is expected to see Chairman Jerome Powell underline a willingness to take further action to support the economy and maintain easy financial conditions.
The Fed on Tuesday announced that its board of governors had decided to extend several emergency loan programs that had been set to expire on Sept. 30 until the end of the year.
Markets saw little movement after the announcement, but the announcement should shore up confidence around a market that has surged back from a COVID-19 induced panic in large part due to monetary stimulus provided by the Fed, said Thomas Kee, chief executive of Stock Traders Daily, in a note.
“The FOMC remains ‘locked and loaded’ and now the hedge funds that piggyback the FOMC have the extended confidence that the [Federal Open Market Committee] will be there to buy more if the market experiences the slightest amount of trouble through the end of the year,” he wrote, referring to the Fed’s policy-setting panel. “The FOMC has the facilities in place to do it without any policy adjustments.”
The Case-Shiller home price index for May rose 3.7% on an annual basis in May.
The Conference Board’s consumer-confidence index fell to 92.6 in July from a revised 98.3 reading in June. Economists polled by MarketWatch had expected a reading of 96.0.
The measure of how consumers feel about the economy right now actually rose to 94.2 in July from 86.7, but the subindex that gauges expectations about the future fell to a four-month low 91.5 from 106.1 in June.
“The data signals that consumers, in the face of rising virus cases and a reversal in labor market gains, are becoming more cautious about the continued healing of the economy,” wrote economists Kathy Bostjancic and Gregory Daco of Oxford Economics, in a note. “While the present situations index increased on the month, if the economy does not regain forward momentum, we are likely to see some retrenchment in the present assessment soon.”
Which companies are in focus?
- Pfizer shares were up 2.9% after beating earnings and revenue expectations and raising its full-year outlook.
- 3M Co. shares fell 4.7% after the diversified maker of health care, consumer and industrial products reported second-quarter profit and revenue that came in below expectations, with results “significantly impacted” by the COVID-19 pandemic.
- Shares of McDonald’s Corp. were off 2.4% after the fast-food chain reported earnings that fell short of Wall Street forecasts.
- Raytheon Technologies Corp. RTX,
-0.62% shares were off 1.9% after it beat both earnings and revenue forecasts. - Eastman Kodak Co. KODK,
+233.20% shares soared 256% after The Wall Street Journal reported that the print and advanced materials and chemicals company secured a $ 765 million government loan to help with the production of drugs to treat a variety of medical conditions. - Shares of Harley-Davidson Inc. HOG,
-7.50% were more than 7% lower after the motorcycle maker swung to a loss in the second quarter and unveiled an overhaul of its business that will see it exit certain markets and streamline its product line.
How are other markets trading?
In Asia, China’s CSI 300 gauge 000300,
In Europe, the Stoxx 600 Europe index SXXP,
Gold futures GCQ20,
CLU20,
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y,
