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Shares slip as investors follow the talks about coronavirus aid, assessing income streams

Shares were slightly lower on Tuesday as investors focused on talks between Republicans and Democrats about a second coronavirus aid package and a torrent of second-quarter results.

What do large indexes do?

The Dow Jones Industrial Average DJIA,
decreased by 141.16 points or 0.5% to 26,443.61 while the S&P 500 SPX,
fell 7.46 points, or 0.2%, to 3,231.95 in quiet trading. The Nasdaq Composite COMP,
lost 59.69 points, or 0.6%, to trade at 10,476.58.

The Dow on Monday ended with a profit of 114.88 points, or 0.4%, at 26,584.77, while the S&P 500 achieved 23.78 points or 0.74%, finishing at 3,239.41. The Nasdaq Composite increased by 173.09 points to finish at 10,536.27, a 1.7% gain.

What drives the market?

Senate Republicans unveiled a corona virus aid package of about $ 1 trillion on Monday, launching negotiations with Democrats on a package containing some data indicating that the US economic recovery is stalling.

A fight for additional unemployment benefits is imminent, with Democrats keen to keep the existing $ 600 weekly supplement, while the Republican plan would reduce it to an add-on of $ 200 until September. The additional unemployment benefits will expire at the end of the month. . Democrats and Republicans also want to run another round of stimulus checks, but disagree on the details.

See:Republicans and Democrats both want another round of stimulus checks – but they disagree

Analysts said the added unemployment benefits have been attributed to helping cushion the economic blow from the COVID-19 pandemic.

“In our opinion, for stocks to continue yesterday’s recovery, a common ground must be found before Friday, when heightened unemployment benefits expire,” said Charalambos Pissouros, senior market analyst at JFD Group. Pissouros said a packet of nearly $ 1 trillion or less would likely disappoint the market.

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

On the vaccine front, Moderna Inc.
+ 3.11%
started his late phase process while Pfizer Inc.
+ 4.06%
and BioNTech
also went late from their candidates.

Income reports came in from a number of high-profile companies, including Dow components 3M Co.
and McDonald’s Corp.
as the busiest week of the profit season continues.

The Federal Reserve would start a two-day policy meeting on Tuesday that is unlikely to lead to much action, but President Jerome Powell is expected to underline the willingness to take further action to support the economy and preserve financial conditions.

The Fed announced on Tuesday that its board of directors had decided to extend several emergency credit programs that would expire on September 30 until the end of the year.

Markets saw little movement after the announcement, but the announcement should boost confidence around a market that has largely returned from a panic triggered by COVID-19 due to Fed monetary stimulus, said Stock Traders chief executive Thomas Kee Daily , in a note.

“The FOMC remains ‘locked and loaded’ and now the hedge funds hitching the FOMC have the extensive confidence that the [Federal Open Market Committee] will be there to buy more if the market experiences the least problems by the end of the year, ”he wrote, referring to the Fed’s policy-making panel. “The FOMC has the facilities to do it without policy adjustments.”

The May Case-Shiller house price index rose 3.7% year-on-year in May.

The Conference Board’s consumer confidence index fell to 92.6 in July, after a revised reading of 98.3 in June. Economists surveyed by MarketWatch expected a score of 96.0.

The measure of how consumers feel about the economy actually rose from 86.7 in July to 94.2 in July, but the sub-index measuring expectations for the future fell from 106.1 in June to a four-month low 91 , 5.

“The data shows that consumers are becoming more cautious about the ongoing recovery of the economy, in light of rising viruses and a reversal in labor market earnings,” economists Kathy Bostjancic and Gregory Daco of Oxford Economics wrote in a note. “While the index for the current situations has risen on the month, if the economy does not move forward, we are likely to see a cut in the current rating soon.”

Which companies are central?
  • The Pfizer share rose 2.9% after outperforming earnings and sales expectations and raising the full-year outlook.
  • 3M Co. shares declined 4.7% after the diversified maker of healthcare, consumer and industrial products reported second quarter earnings and revenues that were below expectations, with results “significantly impacted” by the COVID-19 pandemic.
  • Shares of McDonald’s Corp. declined 2.4% after the fast food chain reported earnings that fell short of Wall Street’s forecasts.
  • Raytheon Technologies Corp.
    shares fell 1.9% after it exceeded both earnings and sales forecasts.

  • Eastman Kodak Co.
    + 211.83%
    shares rose 256% after The Wall Street Journal reported that the print and advanced materials and chemicals company had received a $ 765 million government loan to help manufacture drugs for the treatment of various medical conditions.

  • Shares of Harley-Davidson Inc.. PIG,
    were down more than 7% after the engine manufacturer suffered a loss in the second quarter and revealed a review of its business, which will leave certain markets and streamline its product line.

How do other markets trade?

In Asia, China’s CSI 300 meters 000300,
+ 0.87%
increased 0.9%, the Shanghai Composite SHCOMP,
+ 0.70%
achieved 0.7%, Hong Kong’s Hang Seng Index HSI,
+ 0.68%
rose 0.7% and the Japanese Nikkei 225 NIK,
advanced 0.3%.

In Europe, the Stoxx 600 Europe index SXXP,
+ 0.41%
and the British FTSE 100 UKX,
+ 0.39%
both were 0.3% higher.

Gold futures GCQ20,
+ 0.63%
up 0.9% per day after reaching a record high, while the ICE US Dollar Index DXY,
rose 0.1% per day after reaching a two-year low.

Oil futures were lower as traders placed bets on supply data, with the US benchmark CLU20,
down 1.1% on the New York Mercantile Exchange.

The return on the 10-year US Treasury bill
was off 0.8 basis point at 0.595%. Returns move in the opposite direction of prices.