U.S. stock benchmarks opened near unchanged early Tuesday, fighting for direction a day after a solid rally in shares of technology and e-commerce companies propelled the Nasdaq Composite to its 29th record close of 2020.
Investors trained their attention on company earnings reports and negotiations between Democrats and Republicans in Congress over a new round of coronavirus relief for Americans that have been put out of work due to the COVID-19 pandemic.
How are equity benchmarks performing
The Dow Jones Industrial Average
retreated 45 points, or 0.2%, at around 26,618, while the S&P 500 index
declined 6 points, or 0.2%, to 3,289. The Nasdaq Composite Index
gave up 22 points, or 0.2%. at 10,880.
On Monday, the Dow climbed 236.08 points, or 0.9%, to close at 26,664.40. The S&P 500
rose 23.49 points, or 0.7%, to 3,294.61. The Nasdaq Composite gained 157.52 points, or 1.5%, to close at 10,902.80.
What’s driving the market?
Market participants were watching incremental progress between Democrats and Republicans over a fiscal relief package that could deliver trillions of dollars more to Americans that have lost their jobs amid the worst pandemic in generations, with a resolution looking unlikely until next week at the earliest.
Late Monday, Treasury Secretary Steven Mnuchin said that Republicans had “made a little progress” in two-hour discussions to resolve differences, while Senate Minority Leader Chuck Schumer said progress was made on providing funding for school safety during the epidemic, but impasses remain on issues including state and local aid and the extension of supplemental insurance for the unemployed. There is a “desire to get something done as soon as we can,” Schumer said, speaking to reporters.
Talks have dragged on as the federal unemployment benefits of $600 a week have expired, as has a federal moratorium on evictions. There is growing talk that a deal won’t be reached until September.
Central bankers on Monday said that the talks in Congress represent an important part of avoiding a deeper recession.
“The ball is in Congress’ court,” Chicago Federal Reserve President Charles Evans told reporters in summarizing the current state of economic policy. “Fiscal policy is really fundamental for getting us going,” he said.
Colin Cieszynski, chief market strategist at SIA Wealth Management said that investors are digesting corporate earnings reports and developments in Washington ahead of the important monthly employment report due on Friday.
“US markets have paused this morning while investors consider this week’s developments so far and catch their breath while waiting for a large amount of scheduled news due later in the week,” he said in a Tuesday research.
Looking ahead, Tuesday trade is light on data but reports on vehicle sales will come throughout the morning, with a reading on factory orders for June due at 10 a.m. Eastern Time.
Which stocks are in focus?
- Ralph Lauren Inc.
stock fell 6.2% Tuesday after the luxury lifestyle brand reported fiscal first-quarter revenue that missed expectations.
- Shares of Abiomed Inc.
edged 0.3% higher on Tuesday after the company said its Impella heart pump had received an emergency use authorization from the Food and Drug Administration as a treatment for some COVID-19 patients.
- Travel firm Booking.com
said it would cut 25% of its workforce as a result of the COVID-19 pandemic. Shares were off 0.2% early Tuesday.
- KKR & Co.
on Tuesday said its second-quarter profit rose year over year, marking a recovery for the asset-management company. Its stock was down 0.6%.
announced that CEO Jim Hackett was retiring Oct. 1.
- Space-tourism company Virgin Galactic Holdings
says it entered into deposit agreements with a dozen new customers, plans to sell more than 20 million fresh shares. Shares tumbled 12%.
- Market participants are awaiting quarterly results from Walt Disney & Co.
after the close of regular trade on Tuesday. Disney shares traded 0.5% higher.
- Alternative-fuel truck marker Nikola Corp.
will report later Tuesday. Its stock gained 0.6%.
- Dating platform Match Group Inc.
is scheduled to report its results after the closing bell. Shares were trading 2.1% lower Tuesday.
- Alternative meat maker Beyond Meat
is set to report its earnings in the after hours. Its stock gained 1.2%.
How are other markets trading?
In Asian trade Tuesday, China’s CSI 300 index
gained less than 0.1%, the Shanghai Composite Index inched 0.1% higher. Japan’s benchmark Nikkei index
climbed 1.7% after a 2.2% gain on Monday.
In other assets, the greenback rose, with the ICE U.S. Dollar index
fell with West Texas Intermediate oil declining 1%, or 41 cents, to $40.60, on the New York Mercantile Exchange Gold futures for December
rose $5.70, or 0.3%, at $1,992 an ounce.