By Sinéad Carew
(Reuters) – The Dow and Nasdaq were in decline on Tuesday while the S&P eked out a small gain as investors eyed weakening consumer confidence and disappointing business updates as well as a smaller than hoped for coronavirus aid plan from U.S. Senate Republicans.
Weighing down the Dow, industrial conglomerate 3M Co <MMM.N> dropped 4.5% after reporting a second-quarter plunge in demand across its businesses and McDonald’s Corp <MCD.N> fell 2.2% after a surprisingly big drop in global same-store sales.
Data released in the morning showed U.S. consumer confidence ebbed in July as coronavirus infections flared up across the country.
“It’s a little bit of a lot of things,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
He called the consumer survey “unsettling” evidence that “individuals are increasingly concerned about the recent surge in coronavirus impacting their finances and their mobility.”
Luschini also worried about prospects for a U.S. pandemic aid package. The $1 trillion aid proposal announced on Monday by Senate Republicans, four days before millions of Americans lose unemployment benefits, met opposition by members of both parties.
“There has be tremendous compromise from both parties to get to some agreement,” he said, noting a congressional recess scheduled for August adds deadline pressure.
“It’s particularly critical at this time since the market is really feeding off the largess that’s been expended by fiscal and monetary authorities,” he said.
At 2:18 p.m. ET, the Dow Jones Industrial Average <.DJI> fell 56.13 points, or 0.21%, to 26,528.64, the S&P 500 <.SPX> gained 1.11 points, or 0.03%, to 3,240.52 and the Nasdaq Composite <.IXIC> dropped 36.80 points, or 0.35%, to 10,499.46.
Materials <.SPLRCM> and Energy <.SPNY> were the biggest percentage decliners of the S&P’s 11 major sectors. Defensive real estate <.SPLRCR> and utilities <.SPLRCU> sectors were the biggest gainers.
The U.S. Federal Reserve was expected to reiterate its accommodative stance when it wraps up its two-day policy meeting on Wednesday afternoon. On Tuesday, the Fed said it would extend several lending facilities through year end, a sign the pandemic’s economic impact has been longer than expected.
Of the S&P 500 companies that have reported earnings so far this quarter, about 80% surpassed significantly lowered forecasts for quarterly profit, according to Refinitiv IBES data, An average of 71% companies beat profit estimates over the past four quarters.
A focus this week will be results from Wall Street’s trillion-dollar market value companies – Apple Inc <AAPL.O>, Amazon.com Inc <AMZN.O> and Alphabet Inc <GOOGL.O> – as well as Facebook Inc <FB.O>.
Pfizer Inc <PFE.N> was up 4% after it raised its full-year forecast on strong demand for cancer drugs and blood thinners. Late on Monday, the drugmaker announced a pivotal global study to evaluate a COVID-19 vaccine candidate.
Advancing issues outnumbered declining ones on the NYSE by a 1.16-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favored decliners.
The S&P 500 posted 24 new 52-week highs and no new lows; the Nasdaq Composite recorded 52 new highs and 17 new lows.
(Additional reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Shounak Dasgupta, Maju Samuel and David Gregorio)
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