EU and US could reach trade deal this weekend - Reuters
* Intel jumps on Third Point's push to explore deal options
* Small caps underperform broader market
* U.S. Senate leader McConnell feeds doubt on stimulus
(New throughout, updates prices, market activity and comments
to market close)
By Chuck Mikolajczak
NEW YORK, Dec 29 (Reuters) - U.S. stocks edged lower on
Tuesday in choppy trading after hitting record highs, as
investors worried about the path of the economic reopening and
whether the Senate would authorize additional pandemic aid
checks.
Modest gains in early trading brought stocks to an intraday
record, but the gains evaporated after U.S. Senate Majority
Leader Mitch McConnell blocked immediate consideration of the
measure calling for an increase in stimulus payments from $600
to $2,000 on Tuesday. Final passage of the proposal would
require 60 votes and the backing of a dozen Republicans.
McConnell said the chamber would address the increased
payments this week along with limits on big technology companies
and election integrity. McConnell's comment comes a day after Democratic-led House
of Representatives approved the move to bump up direct payments.
"The move by Majority Leader McConnell to not endorse the
$2,000 disbursements turned equity markets from green to red
around midday," said Joseph Sroka, chief investment officer at
NovaPoint in Atlanta.
"The plan that was originally signed is baked in. The
question as to whether the bigger individual checks get passed
is up for debate."
Unofficially, the Dow Jones Industrial Average .DJI fell
65.4 points, or 0.22%, to 30,338.57, the S&P 500 .SPX lost
8.46 points, or 0.23%, to 3,726.9 and the Nasdaq Composite
.IXIC dropped 49.85 points, or 0.39%, to 12,849.57.
Volumes are expected to be light in the holiday-shortened
week, which could lead to boost volatility. The S&P 500 is up
about 15% so far this year, with just two trading days left in
2020.
Wall Street's three main indexes opened at new highs for a
second straight session after Trump signed a $2.3 trillion
fiscal bill that restored jobless benefits and averted a federal
government shutdown.
More than 2 million Americans have been inoculated, helping
investors look past a surge in infections that topped 19
million, with California, a major U.S. virus hot spot, likely to
extend strict stay-at-home orders. But a sharp drop in small cap stocks could mark concern
surrounding the surge in infections causing a slower than hoped
for reopening, according to Stephen Massocca, senior vice
president at Wedbush Securities in San Francisco. The Russell
2000 small cap index was off about 2% on the day.
Unprecedented monetary and fiscal stimulus measures, along
with positive vaccine developments have helped the S&P 500
.SPX bounce back from a virus-fueled crash in March.
The benchmark index is up more than 10% for the quarter as
investors have flocked to economically-sensitive stocks from the
so called 'stay-at-home' plays on hopes of a recovery.
Intel Corp INTC.O jumped after Reuters reported activist
hedge fund Third Point LLC is pushing the chipmaker to explore
strategic options, including whether it should remain an
integrated device manufacturer. After rising as much as 2.6%, Boeing BA.N shares gave back
earlier gains as its 737 MAX plane resumed passenger flights in
the United States for the first time after a 20-month safety ban
was lifted last month. Snapchat owner Snap Inc SNAP.N climbed after Goldman Sachs
raised its price target on the stock on upbeat revenue growth
prospects.