By Devik Jain and Medha Singh
(Reuters) – U.S. stocks fell on Tuesday as lawmakers geared up for grueling talks over a coronavirus aid plan, with the blue-chip Dow index weighed down by 3M and McDonald’s shares after the companies reported quarterly profits that missed estimates.
Industrial conglomerate 3M Co <MMM.N> dropped 4.3% as it reported a plunge in demand across its business units in the second quarter.
McDonald’s Corp <MCD.N> fell 2% after posting a bigger-than-expected drop in global same-store sales and missing profit expectations, as its restaurants were shut due to the pandemic.
Pfizer Inc <PFE.N>, on the other hand, rose 2.7% 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.
Of the 130 S&P 500 companies that have reported, about 80% of them surpassed significantly lowered forecasts for profit, according to Refinitiv IBES data, better than the average of 71% companies beating profit estimates over the past four quarters.
A rally in U.S. stocks slowed recently as investors worried about signs of a stalling economic recovery amid a resurgence in coronavirus cases, while awaiting progress on government stimulus talks.
Senate Republicans announced on Monday a $1 trillion aid package hammered out with the White House — four days before millions of Americans lose unemployment benefits — but the proposal sparked immediate opposition from both Democrats and some Republicans.
Latest data showed U.S. consumer confidence ebbed in July amid a flare-up in coronavirus infections across the country.
The U.S. Federal Reserve also said it would extend several of its lending facilities through the end of the year, in a sign the economic impact of the pandemic has been more prolonged than expected.
“We’re in a bit of a pause on the economic recovery while we wait for more progress on vaccine developments and treatments,” said Jeff Buchbinder, equity strategist at LPL Financial in the Greater Boston Area.
A major focus this week will be results from members of Wall Street’s trillion-dollar club — Apple Inc <AAPL.O>, Amazon.com Inc <AMZN.O>, Alphabet Inc <GOOGL.O> — and Facebook Inc <FB.O>.
Technology stocks <.SPLRCT> weighed the most on the benchmark S&P 500 index.
At 11:14 a.m. ET, the Dow Jones Industrial Average <.DJI> was down 93.57 points, or 0.35%, at 26,491.20, the S&P 500 <.SPX> was down 2.52 points, or 0.08%, at 3,236.89. The Nasdaq Composite <.IXIC> was down 41.09 points, or 0.39%, at 10,495.18.
The U.S. central bank is expected to reiterate its accommodative stance when it wraps up its two-day policy meeting on Wednesday afternoon.
Harley-Davidson Inc <HOG.N> slid 7.8% after reporting an unexpected quarterly loss due to disruptions caused by the virus outbreak.
Declining issues outnumbered advancers for a 1.10-to-1 ratio on the NYSE and a 1.59-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and no new low, while the Nasdaq recorded 42 new highs and 15 new lows.
(Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)
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