(Reuters) – U.S. stocks closed lower on Tuesday, with the S&P 500 and Dow snapping a seven-day streak of gains and falling late in the session on growing uncertainty about breaking a stalemate in Washington over a fiscal stimulus deal.
Both indexes had been higher for much of the session, and the S&P 500 came within striking distance of its closing record high from February, before the onset of the coronavirus crisis in the United States that caused one of Wall Street’s most dramatic crashes in history.
The day’s declines followed comments from U.S. Senate Republican leader Mitch McConnell, who told Fox News that White House negotiators had not spoken on Tuesday with Democratic leaders in the U.S. Congress on coronavirus aid legislation after talks broke down last week.
Investors have been hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with U.S. cases surpassing 5 million last week.
“We’re sitting here close to the all-time highs in the S&P 500, so any potential negative headline like that can cause a hiccup,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.
The Nasdaq fell more than 1%, extending recent losses and registering its biggest daily percentage decline since July 23, with investors continuing to shed technology-related market heavyweights in favor of value names.
Wedbush trader Joel Kulina said concerns about the stalemate in stimulus negotiations added to pressure to sell recently strong performing tech stocks.
“It just feels like an acceleration of the growth unwind that started last Friday. Today marks day three of the unwind out of growth,” Kulina said. “But I’m not seeing panicking.”
