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Investing.com – The Dow drifted lower on Tuesday, paced by declines in 3M and McDonald’s following mixed second-quarter earnings results and signs the strength of consumer is on the wane.
The Dow Jones Industrial Average fell 0.36%, the Nasdaq Composite slipped 0.27% and the S&P 500 was flat%
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 4.7% after the manufacturer reported second-quarter earnings that fell short of expectations, as weakness in its transportation and health care businesses weighed.
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 were boosted by an 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 hotspots 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.
Elsewhere, tech struggled to hold onto its momentum from a day earlier. The so-called “fab 5” tech stocks, with the exception of Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT), traded below the flatline. Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), and Alphabet (NASDAQ:GOOGL) were negative on the day.
Elsewhere, Tesla (NASDAQ:TSLA) was flat after shrugging off 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.
