NEW YORK (Reuters) – US stocks tumbled slightly lower in choppy trading on Tuesday after hitting record highs as investors worried about the path of the economic reopening and whether the Senate would allow additional pandemic controls.
Modest early trading gains pushed the stock to an intraday record, but the advance evaporated after US Senate leader Mitch McConnell, the majority leader of the US Senate, blocked immediate consideration of the measure calling for an increase of the incentive payments from $ 600 to $ 2,000. Final passage of the proposal requires 60 votes and the support of a dozen Republicans.
McConnell said the chamber would address the increased payments this week, along with restrictions on major tech companies and election integrity.
McConnell’s comment comes a day after the Democrat-led House of Representatives approved the move to ramp up direct payments.
“Majority leader McConnell’s move not to approve the $ 2,000 payouts turned stock markets from green to red at noon,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.
“The plan that was originally signed is ingrained. The question of whether the larger individual checks will pass is up for debate.”
The Dow Jones Industrial Average fell 68.3 points, or 0.22%, to 30,335.67, the S&P 500 lost 8.32 points or 0.22% to 3,727.04 and the Nasdaq Composite fell 49.20 points, or 0.38%, to 12,850.22.
Volumes are expected to be light in the holiday shortened week, which could lead to greater volatility. The S&P 500 is up 15.4% so far this year, with only two trading days left in 2020.
Wall Street’s three major indices hit new highs for a second consecutive session after Trump signed a $ 2.3 trillion tax bill that restored unemployment benefits and averted a federal government shutdown.
More than 2 million Americans have been vaccinated, allowing investors to see past a surge in infections of more than 19 million, with California, a major virus hotspot in the US, likely to extend strict stay-at-home orders.
However, according to Stephen Massocca, senior vice president at Wedbush Securities in San Francisco, a sharp drop in small-cap stocks could signal concerns about the rise in infections, which will make reopening slower than hoped. The Russell 2000 small cap index was less than 1.85% for one day, the largest one-day percentage drop in a month.
Unprecedented monetary and fiscal stimulus, along with positive vaccine developments, helped the S&P 500 recover from a virus-induced crash in March.
The benchmark index is up more than 10% this quarter as investors have flocked to economically sensitive stocks on the so-called ‘stay-at-home’ hopes of recovery.
Intel Corp. rose 4.93% after Reuters reported activist hedge fund Third Point LLC is pushing the chipmaker to explore strategic options, including whether to remain an integrated device manufacturer. [nL1N2J9139]
After a staggering 2.6% rise, Boeing shares returned previous gains to close 0.07% as the 737 MAX plane resumed passenger flights in the United States for the first time after a 20-month safety ban last month was lifted.
Snapchat owner Snap Inc climbed 6.15% after Goldman Sachs raised its share price target based on positive revenue growth outlook.
The volume on the US stock markets was 9.46 billion shares, compared to the average of 11.14 billion for the full session of the past 20 trading days.
Waning problems outpaced the advance on the NYSE by a ratio of 1.70 to 1; on Nasdaq, a 2.57 to 1 ratio was in favor of declining companies.
The S&P 500 posted 21 new highs in 52 weeks and no new lows; the Nasdaq Composite registered 83 new highs and 27 new lows.
Additional reporting by Stephen Culp; Editing by David Gregorio