The market opened lower on Tuesday, but pared back losses and turned positive as investors watched for updates on the next round of coronavirus stimulus from U.S. lawmakers.
The Dow Jones Industrial Average was up 0.1%, nearly 50 points, on Tuesday, while the S&P 500 fell 0.2% and the tech-heavy Nasdaq Composite lost 0.4%.
Market sentiment initially took a hit as lawmakers remain deadlocked over a new coronavirus stimulus package: House Speaker Nancy Pelosi cited “productive” discussions on Monday, but added that both sides still have differences.
Democrats and Republicans have reportedly agreed on an additional $1,200 stimulus check, while they are yet to reach a solution on additional federal unemployment insurance, which expired last week.
Shares of Microsoft fell over 2.5% after rallying more than 5.5% on Monday: The company recently confirmed that it is holding talks to acquire Chinese-owned social media app TikTok, which President Donald Trump has threatened to ban in the U.S. if it’s not bought by September.
Chinese state media, for their part, responded with threats of possible retaliation on Tuesday, calling the U.S. a “rogue country” and the potential sale of TikTok to Microsoft “open robbery.”
Meanwhile, shares of Ford jumped 1.5% after the company announced that CEO Jim Hackett will retire in October and be replaced by COO Jim Farley, a move which comes in the middle of an $11 billion restructuring project.
Of the 352 companies in the S&P 500 that have reported second quarter earnings so far, nearly 83% have beaten Wall Street expectations, according to Refinitiv data. That is the highest rate on record dating back to 1994, with just 16% of companies reporting below analyst expectations.
A strong rally in Big Tech stocks pushed the market higher on Monday to kick off the new month, with the Nasdaq jumping 1.5% to close at a new record high. The Dow rose 0.9%, while the S&P gained 0.7%—reaching its highest closing level since February 21, before the coronavirus market sell-off. The major averages have now posted four consecutive months of gains after moving higher again in July.
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