Stocks decline as investors watch coronavirus aid talks, earnings flood reports weigh

Posted: Jul 28, 2020 at 9:43 am ET

Investors did not love McDonald’s second quarter results.
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Shares were slightly lower earlier Tuesday when investors focused on conversations between Republicans and Democrats about a second coronavirus aid package and a deluge of second-quarter corporate results.

What are the main indexes doing?

The Dow Jones Industrial Average


It fell 65.10 points, or 0.2%, to 26,519.67, while the S&P 500


decreased 3.52 points, or 0.1%, to 3,235.89. The Nasdaq compound


it lost 35.94 points, or 0.3%, to trade at 10,500.32.

The Dow ended Monday with a gain of 114.88 points, or 0.4%, at 26,584.77, while the S&P 500 gained 23.78 points, or 0.74%, to close at 3,239.41. The Nasdaq Composite advanced 173.09 points to finish at 10,536.27, an increase of 1.7%.

What is driving the market?

Senate Republicans on Monday unveiled a coronavirus relief package of about $ 1 trillion, kicking off negotiations with Democrats on a package with some data suggesting that the US economic recovery is stalling.

A fight is looming for unemployment jobless benefits, with Democrats eager to keep the existing weekly supplement of $ 600, while the Republican plan would cut it to a supplement of $ 200 through September. Supplemental unemployment benefits expire at the end of the month. Democrats and Republicans also want to issue another round of stimulus checks, but disagree with the details.

See:Republicans and Democrats want another round of stimulus checks, but this is where they disagree.

Analysts said the additional unemployment benefits have been credited with helping to cushion the economic blow from the COVID-19 pandemic.

“In our view, for stocks to continue yesterday’s rally, common ground must be found before Friday when the improved unemployment benefits expire,” said Charalambos Pissouros, senior market analyst at JFD Group. Pissouros said a package close to $ 1 trillion or less would likely be a disappointment to the market.

Meanwhile, the number of cases in the US increased to 4.29 million and the death toll reached 148,056. Texas became the fourth state with more than 400,000 cases, joining California, Florida, and New York. The global count of confirmed cases of COVID-19 rose to 16.5 million on Tuesday, according to data added by Johns Hopkins University, while the death toll rose to 654,327.

On the vaccine front, Modern Inc.


started his trial in late stage while Pfizer Inc


and BioNTech


They also entered late-stage trials with their candidates.

Earnings reports were arriving or expiring from several high-profile companies, including 3M Co.


Pfizer and McDonald’s Corp.


before the opening bell in the busiest week of the earnings season.

The Federal Reserve will begin a two-day policy meeting on Tuesday that is unlikely to generate much action, but President Jerome Powell is expected to underscore the will to take further steps to support the economy and maintain easy financial conditions.

The Case-Shiller Home Price Index for May rose 3.7% on a yearly basis in May. A reading on consumer confidence for July is due at 10 a.m. EST.

Which companies are in focus?
  • Pfizer’s shares rose 1.7% after exceeding 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 industry products reported second-quarter earnings and revenues that were below expectations, with “significantly affected” results. due to the COVID-19 pandemic.
  • Actions of McDonald’s Corp. They lost 0.9% after the fast food chain reported earnings that fell short of Wall Street forecasts.
  • Raytheon Technologies Corp.


    Shares fell 0.4% after beating earnings and earnings forecasts.

  • Eastman Kodak Co.


    Shares soared 277% after The Wall Street Journal reported that the print and advanced materials and chemicals company obtained a $ 765 million government loan to help with the production of drugs to treat a variety of medical conditions.

  • Actions of Harley-Davidson Inc.


    They were 7% lower after the motorcycle maker suffered a loss in the second quarter and unveiled a review of its business that will push it out of certain markets and streamline its product line.

How do other markets operate?

In Asia, China’s CSI 300 meter


rose 0.9%, the Shanghai compound


gained 0.7%, the Hong Kong Hang Seng Index


rose 0.7% and Nikkei 225 from Japan


advanced 0.3%.

In Europe, the Stoxx 600 Europe index


was 0.1%, while the UK FTSE 100


it was quoted almost unchanged.

Gold futures


They rose 0.1% a day after reaching a record high, while the ICE index in US dollars.


It rose 0.1% after reaching a two-year low.


Oil futures were lower, with the US benchmark index.


it fell 1.1% on the New York Mercantile Exchange.

The yield on the 10-year U.S. Treasury note


it was out of 0.6 basis points at 0.597%. Yields move in the opposite direction of prices.