US stocks decline as stimulus negotiations heat up and earnings miss hopes

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FILE PHOTO: A trader adjusts his mask as he works on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues in the Manhattan borough of New York, U.S., May 28, 2020. REUTERS/Lucas Jackson

US stocks closed down on Tuesday as investors mulled Senate Republicans’ coronavirus stimulus package and a slew of earnings reports.
The GOP continued negotiations on its initial fiscal relief plan throughout the day. The $1 trillion package includes another round of $1,200 payments and additional funds for small-business loans.
Experts expect a long negotiation period as Republicans and Democrats spar over their respective proposals.
Earnings misses from 3M and McDonald’s weighed on major indexes.
Oil tumbled through the session, with West Texas Intermediate crude dropping as much as 1.8%, to $40.85 per barrel.
Watch major indexes update live here.

US stocks slid on Tuesday as investors braced for prolonged negotiations between Democrats and Republicans on another round of economic stimulus.

The GOP continued deliberations on its fiscal relief plan through the session. The $1 trillion package includes another round of $1,200 direct payments, a $60 billion expansion of small-business loans, and more than $100 billion for schools. Senate Majority Leader Mitch McConnell said a stimulus measure won’t reach a vote unless it includes liability restrictions.

Senate Republicans’ spending plan came in far below the $3.5 trillion sought by House Speaker Nancy Pelosi. Experts expect a long negotiation process before a package is passed.

Here’s where US indexes stood at the 4 p.m. ET market close on Tuesday:

S&P 500: 3,218.54, down 0.64%
Dow Jones industrial average: 26,379.56, down 0.77% (205.21 points)
Nasdaq composite: 10,402.09, down 1.27%

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The proposal was revealed after expanded unemployment benefits expired this week, pulling a key lifeline from millions of jobless Americans as the coronavirus continues to slam the economy. The new GOP bill will replace the $600 per week expansion with benefits that match 70% of a worker’s past wages, McConnell said Tuesday.

Investors also digested earnings misses from McDonald’s and 3M. The restaurant chain missed expectations for quarterly profit and posted a 30% drop in revenue. 3M missed estimates for revenue and earnings as sales of personal protective equipment failed to outweigh a broader slowdown in demand for its office products.


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Source:: Business Insider

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