US stocks slide as investors balk at stimulus delay and surging COVID-19 cases
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- US stocks fell on Tuesday as new hurdles to passing a stimulus deal curbed investor optimism.
- Senate Majority Leader Mitch McConnell refused to back a $908 billion proposal on Monday, instead urging Congress to pass a package that includes pandemic-related liability protections for businesses.
- The package had garnered support from Democrats and Republicans alike, fueling hopes for near-term passage. Lawmakers now aim to extend government funding by a week to further negotiate a stimulus deal.
- Coronavirus cases continued to trend higher. Deaths neared 275,000 on Monday, according to The COVID Tracking Project.
- Oil futures fell on concerns of weakening demand. West Texas Intermediate crude dropped as much as 1.4%, to $45.14 per barrel.
- Watch major indexes update live here.
US equities fell on Tuesday as soaring coronavirus cases and a holdup in stimulus negotiations dragged on investor sentiment.
Hopes for a $908 billion stimulus package passing before the end of the year softened Monday afternoon. Senate Majority Mitch McConnell tossed cold water on the bipartisan proposal and instead backed his own measure on Monday.
The senator's proposal trades state and local government relief and bolstered unemployment benefits for education and small business aid, as well as pandemic-related liability protections for businesses.
Until then, both Democrats and Republicans had warmed to the $908 billion proposal. Lawmakers now aim to extend government funding by a week to buy time for additional stimulus negotiations.
Here's where US indexes stood shortly after the 9:30 a.m. ET market open on Tuesday:
- S&P 500: 3,683.18, down 0.2%
- Dow Jones industrial average: 30,012.82, down 0.2% (58 points)
- Nasdaq composite: 12,503.92, down 0.1%
Failure to pass more fiscal aid could allow the economic recovery to weaken further as the US enters what's set to be the most dangerous phase of the coronavirus crisis yet. The US reported 180,193 new COVID-19 cases on Monday, bringing the 7-day average to 196,882, according to The COVID Tracking Project. Hospitalizations rose above 102,000 and deaths neared 275,000.
Stocks retreated from record highs to start the week as investors balked at new economic restrictions in California. The state implemented new stay-at-home measures to slow the virus's spread, including bar and restaurant closures. Shops were ordered to cut capacity to 20%.
Though a coronavirus vaccine could win approval from the US Food and Drug Administration as soon as Thursday, soaring case counts spark concern that the economy could shrink again before staging a full recovery.
Tesla fell from record highs after the automaker announced it will raise up to $5 billion through new stock sales. The plans mark Tesla's third stock issuance this year. Wedbush analyst Dan Ives called the sale a "smart move," as it allows Tesla to use some of its 667% year-to-date rally to bolster the company's balance sheet.
Bitcoin again fell below its $19,000 support. The token has fluctuated around that level in recent days as investors mull whether it can reach $20,000 for the first time.
Spot gold gained as much as 0.5%, to $1,872.71 per ounce, at intraday highs. The US dollar wavered against a basket of peer currencies and Treasury yields slid.
Oil futures fell on concerns of the virus and related lockdowns curbing demand. West Texas Intermediate crude dropped as much as 1.4%, to $45.14 per barrel. Brent crude, oil's international benchmark, sank 1.4%, to $48.09 per barrel, at intraday lows.
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