Tuesday's Stock Market Close: Corporate Earnings, Forecasts Weigh On Investors

Weaker-than-expected earnings reports sent stocks lower Tuesday amid investor concerns about the shape of the next round of coronavirus relief and surging coronavirus cases that threaten the nascent economic recovery.

The Dow Jones Industrial Average fell 205.49 to 26,379.28 while the Nasdaq fell 134.18 to 10,402.09 and the S&P 500 dipped 20.97 to 3,218.44.

Volume on the New York Stock Exchange totaled more than 4 billion shares, with 1,349 issues advancing and 1,602 declining. Eighty stocks set new highs while eight set new lows.

Leading the advancing stocks were Eastman Kodak (KODK), Vocera Communications (VCRA) and Sequential Brands Group (SQBG). Kodak announced Tuesday it had won a $765 million government loan to help it create a pharmaceutical division to produce the basic ingredients for generic drugs, easing U.S. reliance on imports. Shares of Kodak surged 203% to close at $7.94.

Shares of 3M (MMM), McDonald’s (MCD) and Harley Davidson (HOG) were among the decliners based on earnings reports. Investors are looking at rest-of-the-year forecasts as the COVID-19 death toll approached 150,000.

“I don’t think the market really cares about second-quarter earnings,” Bob Doll, chief equity strategist and senior portfolio manager at Nuveen, told the Wall Street Journal. “I think it really cares about what the future looks like. How will the third quarter compare to the second and what about 2021?”

Investors also are watching as lawmakers wrangle over the next phase of coronavirus relief. The package of bills unveiled Monday by Republicans has been labeled inadequate by analysts.

The Federal Reserve began its two-day meeting Tuesday, announcing it would extend its lending facilities through the end of the year to help stabilize planning by governments and businesses.

“The reality is that the Fed has proclaimed that they are going to keep the printing presses rolling, they will print money and it has created this all-you-can eat buffet,” Terri Spath, Sierra Investment Management’s chief investment officer, told Bloomberg. “The bottom may be in for the year, but we do expect volatility in the future.”

Foreign markets were mixed. In Asia, Hong Kong’s Hang Seng rose 0.69% while Japan’s Nikkei was off 0.26% and the Shanghai Composite gained 0.71%. Australia’s S&P/ASX fell 0.39%.

In Europe, London’s FTSE inched up 0.4% while the German DAX was off 0.03% and the French CAC fell 0.22%. The Stoxx 600 added 0.42%.

In currency markets, the euro was up 0.3% against the dollar at $1.1718 while the yen fell 0.28% to 105.08 and the British pound rose 0.37% to $1.293. The U.S. dollar index was up 0.07%.

Crude oil futures were off 1.54% to $40.96 a barrel while Brent crude dipped 0.11% to $43.57. Gold added 1.18% to $1,953.90 while silver rose 0.26% to $24.565.