The US Stock Market Declined Under Pressure From Tech Companies
US stock indexes fell following the results of trading on Tuesday, while shares of technology companies fell significantly.
Investors also assessed the draft of a new package of measures to support the US economy for $1 trillion, which was presented on Monday by the majority leader in the US Senate, Republican Mitch McConnell. The initiative, in particular, provides for reducing the amount of the allowance for unemployment benefits from $600 per week to $200 per week.
Democrats, in turn, are in favor of maintaining the size of the surcharge, writes MarketWatch. Analysts believe that these payments helped soften the blow caused by the coronavirus pandemic.
"For stocks to continue yesterday's growth, it is necessary to reach an agreement before Friday, when the payment of increased unemployment benefits expires," said Charalambos Pissouros, chief market analyst at JFD Group.
He also believes that a package of measures of about $1 trillion or less is likely to disappoint the market.
Also, the focus of traders is on the two-day meeting of the Federal Reserve System (FRS) that started on Tuesday, following which, as expected, the US Central Bank will confirm its commitment to maintaining interest rates close to zero for a long time.
The fed on Tuesday extended seven emergency lending programs for three months, until December 31, 2020, to support economic activity during the coronavirus pandemic.
Meanwhile, the US consumer confidence index in July 2020 fell to 92.6 points from a revised 98.3 points in June, according to the research organization Conference Board, which calculates this indicator. Earlier, the June value was estimated at 98.1 points.
Analysts polled by Trading Economics, on average, expected the index to decline in July to 94.5 points.
Papers Amazon.com Inc. (SPB: AMZN) fell 1.8%, while Netflix Inc. (SPB: NFLX) fell 1.4%. Alphabet Inc. (SPB: GOOG) lost 1.7%, Facebook Inc. (SPB: FB) lost 1.5%, and Apple Inc. (SPB: AAPL) lost 1.6%.
Shares of Pfizer Inc. (SPB: PFE) rose 3.9%. The American pharmaceutical company reported a decline in adjusted earnings to $0.78 from $0.8 per share in the second quarter, but analysts polled by FactSet expected a larger decline to $0.67 per share. Besides, Pfizer announced the start of a new phase of clinical trials of the coronavirus vaccine, which the company is developing in conjunction with the German BioNTech.
Cost Of Raytheon Technologies Corp. declined by 0.2%, even though the company's revenue in the second quarter jumped by 24% to $ 14.06 billion, with the consensus forecast of experts at $13.46 billion.
McDonald's Corp. quotes (SPB: MCD) fell 2.5%. The fast-food chain's adjusted earnings in April-June fell to $0.66 from $2.05 per share a year earlier and were below the consensus forecast of $0.74 per share.
3M Co. (SPB: MMM) securities fell by 4.9%. The company recorded a 16% drop in adjusted earnings to $1.78 per share and a 12% drop in revenue to $7.18 billion in the second quarter. Analysts had expected adjusted earnings of $1.81 per share and revenue of $7.32 billion.