Stock-index futures point lower as investors watch coronavirus aid talks, assess flood of earnings reports

Stock-index futures were modestly lower early Tuesday, pointing to a weaker start for U.S. equities as investors focused on talks between Republicans and Democrats on a second coronavirus aid package and a deluge of second-quarter corporate results.

What are major indexes doing?

Futures on the Dow Jones Industrial Average
were off 105 points, or 0.4%, at 26,379, while S&P 500 futures
declined 9.70 points, or 0.3%, to 3,222.50. Nasdaq-100 futures
lost 37.25 points, or 0.4%, to trade at 10,638.00.

The Dow
on Monday finished with a gain of 114.88 points, or 0.4%, at 26,584.77, while the S&P 500
gained 23.78 point, or 0.74%, to close at 3,239.41. The Nasdaq Composite
advanced 173.09 points to end at 10,536.27, a 1.7% gain.

What’s driving the market?

Senate Republicans on Monday unveiled a roughly $1 trillion coronavirus relief package, kicking off negotiations with Democrats over a package with some data suggesting the U.S. economic recovery is stalling.

A fight looms over supplemental unemployment benefits, with Democrats eager to maintain the existing $600 weekly supplement, while the Republican plan would reduce it to a $200 add-on through September. The supplemental jobless benefits are due to expire at the end of the month. Democrats and Republicans also want to issue another round of stimulus checks, but disagree on the details.

See:Republicans and Democrats both want another round of stimulus checks — but here’s where they disagree

Analysts said the added jobless benefits have been credited with helping to cushion the economic blow of the COVID-19 pandemic.

“In our view, for equities to continue yesterday’s rebound, a common ground should be found before Friday when the enhanced unemployment benefits expire,” said Charalambos Pissouros, senior market analyst at JFD Group. Pissouros said a package near $1 trillion or lower would likely come as a disappointment to the market.

Meanwhile, the number of U.S. cases rose to 4.29 million and the death toll hit 148,056. Texas became the fourth state with more than 400,000 cases, joining California, Florida and New York. The global tally for confirmed cases of COVID-19 climbed to 16.5 million on Tuesday, according to data aggregated by Johns Hopkins University, while the death toll rose to 654,327.

On the vaccine front, Moderna Inc.
kicked off its late-stage trial while Pfizer Inc
and BioNTech
entered late-stage trials of their candidates also.

Earnings reports were rolling in or were due from a number of high-profile companies, including 3M Co.
Pfizer and McDonald’s Corp.
ahead of the opening bell in the busiest week of earnings season.

The Federal Reserve will begin a two-day policy meeting Tuesday that’s unlikely to result in much action, but is expected to see Chairman Jerome Powell underline a willingness to take further action to support the economy and maintain easy financial conditions.

The economic calendar features the Case-Shiller home price index for May at 9 a.m. Eastern, while a reading on consumer confidence for July is due at 10 a.m. Eastern.

Which companies are in focus?
  • Pfizer shares were up more than 3% in premarket trade after beating earnings and revenue expectations and raising its full-year outlook.
  • 3M Co. shares fell 2.8% in premarket action after the diversified maker of health care, consumer and industrial products reported second-quarter profit and revenue that came in below expectations, with results “significantly impacted” by the COVID-19 pandemic.
  • Shares of McDonald’s Corp. slumped more than 2% ahead of the bell after the fast-food chain reported earnings that fell short of Wall Street forecasts.
  • Raytheon Technologies Corp.
    shares were higher in premarket action after it beat both earnings and revenue forecasts.

  • Eastman Kodak Co.
    shares soared 220% in premarket trade after The Wall Street Journal reported that the print and advanced materials and chemicals company secured a $765 million government loan to help with the production of drugs to treat a variety of medical conditions.

How are other markets trading?

In Asia, China’s CSI 300 gauge
rose 0.9%, the Shanghai Composite
gained 0.7%, Hong Kong’s Hang Seng Index
rose 0.7% and Japan’s Nikkei 225
advanced 0.3%.

In Europe, the Stoxx 600 Europe index
was off 0.1%, while the U.K.’s FTSE 100
was trading near unchanged.

Gold futures
were up 0.1% a day after hitting an all-time high, while the ICE U.S. Dollar Index
was up 0.1% after hitting a two-year low.

Oil futures were mixed, with the U.S. benchmark
down 0.3% on the New York Mercantile Exchange.

The yield on the 10-year U.S. Treasury note
was off 0.3 basis point at 0.60%. Yields move in the opposite direction of prices.

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