Stocks fell slightly on Tuesday as lawmakers continued their debate over the next coronavirus relief while traders pored over the latest batch of corporate earnings.
The Dow Jones Industrial Average traded 100 points lower, or 0.4%. The S&P 500 dipped 0.2% and the Nasdaq Composite dropped 0.5%.
Senate Majority Leader Mitch McConnell unveiled the Republican coronavirus relief plan Monday after the bell. The legislation would include relief for jobless Americans, another direct payment to individuals of up $1,200, more Paycheck Protection Program small business loan funds, among other provisions.
McConnell said the bill would set federal unemployment insurance at 70% of a worker’s previous wages, replacing the $600 per week which states stopped paying out this week.
“The cutting of the unemployment benefits is setting us up for a political battle and that could take time,” said Peter Cardillo, chief market economist at Spartan Capital Securities, noting this is weighing on market sentiment.
The bill comes as coronavirus cases continue to rise across the U.S. So far, more than 4.2 million infections have been confirmed along with at least 147,303 deaths in the U.S., according to Johns Hopkins University.
Stocks were also under pressure after the release of disappointing quarterly numbers from McDonald’s and 3M.
McDonald’s shares slid 1% after the fast-food giant posted a quarterly profit that missed analyst expectations along with a 30% drop in overall revenue. 3M, another Dow component, dropped 4.6% after its quarterly earnings and revenue were lower than expected.
Visa, Advanced Micro Devices, Amgen, eBay, Mondelez International and Starbucks report after the bell on Tuesday. This is the busiest week of the corporate earnings season, with about 170 companies slated to report.
Meanwhile, the Federal Reserve starts its two-day policy meeting on Tuesday, followed by an interest rate decision on Wednesday. The FOMC decided to maintain the target range for the federal funds rate at 0-0.25% at its last meeting in June as it continued to deal with the impact of the coronavirus (COVID-19) pandemic on the U.S. economy.
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