New York The dispute over another corona aid package for the struggling US economy is putting mood on Wall Street investors. The Dow Jones index of standard values fell 0.8 percent on Tuesday to 26,379.28 points. The broader S&P 500 was 0.6 percent weaker at 3,218.54 points. The index of the technology exchange Nasdaq fell by 1.3 percent to 10,402.09 points.
Republicans in the US Senate presented a $ 1 trillion package of aid, developed with the Presidential Office, on Monday. But the proposal met with immediate criticism from the opposition Democrats and some Republicans.
Time is running out; the federal special unemployment benefit will expire on Friday. “We need a huge compromise from both parties to get any package,” said Mark Luschini, chief strategist at financial services provider Janney Montgomery Scott. The congress holidays are also due in August. “It is particularly critical at this point in time because the market derives its strength from the generosity of governments and central banks.”
Given the ongoing corona virus pandemic, the Federal Reserve (Fed) is extending its bond purchase programs it launched during the crisis. Instead of continuing until the end of September, these will now continue until the end of the year, as the central bank said on Tuesday. This ensures planning security and ensures that the programs are still available to support the economic recovery, it said.
Central bank chief Jerome Powell should go to the press after the two-day deliberations of the money market committee on Wednesday and explain its decisions. Analysts had expected the Fed’s crisis programs to be extended ahead of the meeting given the ongoing pandemic.
The Fed has already lowered its key interest rate to almost zero this year, multiplied its bond purchases and launched extensive credit programs to stabilize the financial markets and the real economy. According to experts, the Fed’s crisis measures, which have been announced at the rush hour since the end of February, are already more extensive than those after the global financial crisis of 2008/2009.
In addition to monetary policy, companies’ business figures on the stock exchange also caused a stir. “This reporting season is a classic example of management burying expectations in the sand and analysts playing along,” said Mike Zigmont, chief analyst at Harvest Volatility Management.
“It’s all about exceeding expectations, and if the companies can’t do it, it’s a story because it’s so rare.” Of the 130 S&P companies that submitted their numbers, 80 percent had theirs lowered Profit expectations exceeded, as can be seen from refinitive IBES data.
Look at the individual values
3M: At the bottom of the Dow were the shares of the conglomerate 3M with a minus of 4.8 percent. Demand collapsed in most business areas during the crisis; only the business with respiratory masks and other protective equipment is going well. 3M is the world’s largest manufacturer of N95 respirators that are in demand in the corona crisis.
McDonald‘s: The losers also included McDonalds shares, which were down 2.5 percent. The consequences of official restrictions to contain the pandemic weigh on the chain, profits and sales collapsed in the second quarter. Numerous restaurants were only able to serve customers if they took food in the car or ordered it home.
Pfizer: The Pfizer shares, on the other hand, gained four percent and were the undisputed leader in the Dow. The pharmaceutical company raised its forecast in view of the high demand for cancer drugs and blood thinners. Pfizer and the Mainz-based biotech company BioNTech had only announced the previous evening that a vaccine candidate against the coronavirus would be tested on up to 30,000 people. If this is successful, an application for approval of the vaccine can be submitted to the authorities in October.
Chip manufacturer: In the wake of the subdued market sentiment, chip values generally fell again on the Nasdaq. NXP Semiconductors was down 4.2 percent, while other industry stocks such as Qualcomm, Xilinx, Broadcom and Micron followed up by up to three percent.
Tesla: Cashing was also the order of the day at Tesla, which fell 4.1 percent after the previous day’s increase. The analysis house Bernstein Research had graded the papers of the electric car manufacturer on Tuesday to “Underperform”. Analyst Toni Sacconaghi wrote in his study that it was difficult for him to justify the high rating of the papers – even under the most optimistic assumptions.
Kodak: Otherwise, Eastman Kodak investors jumped into hope for a new pearl of earnings from the former photo equipment icon. The prospect of the company receiving a multi-million dollar loan from the US government to produce ingredients for medicines caused the stocks on the Nasdaq exchange to triple.
More: Goldman boss Solomon draws gloomy forecast for America.