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Investing.com – Late selling hit the Dow on Tuesday, pressured by a fall in 3M and McDonald’s on weaker-than-expected quarterly results, while weaker consumer confidence raised concerns about the economic recovery.
The Dow Jones Industrial Average fell 0.77%, the Nasdaq Composite slipped 1.27% and the S&P 500 was down 0.65%.
Heavyweight Dow components 3M and McDonald’s came under pressure after delivering quarterly earnings that fell short of expectations, with both companies citing coronavirus-led weaknesses in results.
3M (NYSE:MMM) fell 4.8% after the manufacturer reported second-quarter earnings that fell short of expectations, weighed down by weakness in its transportation and health care businesses.
McDonald’s (NYSE:MCD) slipped 2.5% after its second-quarter earnings missed consensus estimates, as government measures to control the virus dented international sales.
Pfizer (NYSE:PFE) jumped 4% after delivering second-quarter results that beat on both the top and bottom lines as the drugmaker’s sales of cancer and blood thinner drugs offset weaker sales of other drugs in its in portfolio.
As well as better-than-expected earnings, shares of Pfizer got a boost from the announcement that the company together with its partner Biontech Se (NASDAQ:BNTX) will launch a late, late study of their potential Covid-19 vaccine.
The economic front, meanwhile, served as a reminder that the recent spike in cases across the U.S. has put the economic recovery in jeopardy as the consumer, the backbone of the economy, showed signs of weakness in July.
“It seems that reality is setting in for the consumer. In June, the expectations index was 106.1, but the index declined sharply to 91.5 in July as the hopes for a V-shaped recovery faded,” Jefferies (NYSE:JEF) said in a note.
The pace of infection in hot spots including California, Florida, Arizona, and Texas appears to have abated in recent days, but infectious disease specialist Dr. Anthony Fauci warned the Midwest could be next to see a surge in cases.
Rising cases in the U.S. renewed worries over oil demand growth and sent oil prices 1% lower, pushing energy stocks down 1.5%.
Tech struggled to hold onto its momentum from a day earlier. Facebook (NASDAQ:FB), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), and Alphabet (NASDAQ:GOOGL), the so-called fab 5, ended in the red.
Elsewhere, Tesla (NASDAQ:TSLA) fell 4% flat after a downgrade from Bernstein.
Bernstein downgraded Tesla to underperform from market perform, citing worries over valuation after the stock more than trebled over the last three months.
Sentiment on Wall Street was also soured by a lack of progress on a new stimulus bill as U.S. lawmakers struggled to resolve their differences.
