NEW YORK (Reuters) – US stocks fell on hectic Tuesday after hitting record highs, with investors worried about the path of the economic reopening and whether the Senate would authorize additional checks to aid the pandemic.
Modest gains at the start of trading led stocks to an intraday record, but the advance evaporated after U.S. Senate majority leader Mitch McConnell blocked immediate consideration of the measure calling for an increase in $ 600 stimulus payments to $ 2,000. Final approval of the proposal would require 60 votes and the support of a dozen Republicans.
McConnell said the chamber will address increased payments this week, along with limits on major technology companies and electoral integrity.
McConnell’s comment came a day after the Democratic-led House of Representatives approved the measure to increase direct payments.
“Majority leader McConnell’s decision not to endorse the $ 2,000 disbursements turned the stock markets from green to red around noon,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.
“The plan that was originally signed is incorporated. The question of whether larger individual checks will be approved 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 decrease in the shortened week of the holiday, which may increase volatility. The S&P 500 has risen 15.4% so far this year, with only two trading sessions missing in 2020.
Wall Street’s top three indices opened at new highs for a second straight session after Trump signed a $ 2.3 trillion tax bill that restored unemployment benefits and prevented the federal government from closing.
More than 2 million Americans have been vaccinated, helping investors overcome an outbreak of infections that has exceeded 19 million, with California, a major virus site in the United States, likely to extend strict requests to stay at home.
But a sharp drop in small cap stocks may mark concerns about the rise in infections, causing a slower-than-expected reopening, according to Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. The Russell 2000 small cap index was down 1.85% on the day, its biggest percentage drop in a day in a month.
Unprecedented fiscal and monetary stimulus measures, along with positive vaccine developments, helped the S&P 500 recover from a virus crash in March.
The benchmark index rose more than 10% in the quarter, as investors focused on economically sensitive stocks, due to hopes of a recovery.
Intel Corp made a 4.93% jump after Reuters reported that activist fund Third Point LLC is pressuring the chip maker to explore strategic options, including whether to remain an integrated device manufacturer. [nL1N2J9139]
After rising to 2.6%, Boeing’s shares fell back to previous gains, closing at 0.07%, when its 737 MAX plane resumed passenger flights in the United States for the first time after a 20-month safety ban. was suspended last month.
Snapchat’s owner, Snap Inc, rose 6.15% after Goldman Sachs raised its target price on stocks with optimistic prospects for revenue growth.
The volume on the United States stock exchanges was 9.46 billion shares, compared with the average of 11.14 billion for the entire session in the last 20 trading days.
Decreasing issues outperformed advanced issues on the NYSE by a 1.70 to 1 ratio; on the Nasdaq, a 2.57 to 1 ratio favored the declines.
The S&P 500 recorded 21 new 52-week highs and no new lows; the Nasdaq Composite recorded 83 new highs and 27 new lows.
Additional reporting by Stephen Culp; Editing by David Gregorio