By Joe Wallace and Sam Goldfarb 

The S&P 500 turned lower Tuesday afternoon, putting it at risk of ending a seven-day winning streak.

The broad stock market index fell 0.8% after rising for most of the session and flirting with setting its first record since February. The Dow Jones Industrial Average dropped about 140 points, or 0.9%, while the technology-heavy Nasdaq Composite Index slid 1.8%.

Investors continued to closely watch developments in Washington where Democrats and Republicans remained at odds over a broad economic relief package.

Shares of companies that are particularly sensitive to the direction of the U.S. economy--such as banks, energy firms, cruise operators and airlines--had helped pull indexes higher for much of the session.

Investors, however, sold shares of fast-growing technology companies like and Netflix, a reversal of what has been a hugely popular trade in recent months fueled by a belief that those companies are relatively shielded from the pandemic's economic damage.

Other assets viewed as havens also declined. The price of gold price of gold fell 4.5% to $1,932.60 a troy ounce, its biggest one-day percentage decline since March. And the yield on the benchmark 10-year U.S. Treasury note rose to 0.657% from 0.573% Monday, marking its highest close since early June. Yields rise when bond prices fall.

In Washington, administration officials and Democratic leaders urged each other to return to the negotiating table after Mr. Trump issued executive actions on jobless aid and other relief over the weekend.

"The U.S. fiscal stimulus is absolutely critical to keeping market momentum positive," said Nicholas Brooks, head of economic and investment research at Intermediate Capital Group. "Markets are assuming that ultimately Congress will come through with a package, and that there's a lot of brinkmanship going on."

"If we don't get a deal, I think markets will correct quite quickly," Mr. Brooks said.

Mr. Trump also said late Monday that he was "very seriously" considering a cut to capital-gains tax and paring taxes for middle-income families.

A recent surge in coronavirus cases continued to show signs of abating. The U.S. reported fewer than 50,000 new cases for the second day in a row Monday, pushing the total number close to 5.1 million, according to Johns Hopkins University.

However, investors are concerned by a pickup in infections in parts of Europe that had appeared to bring the virus under control.

"It's hard for markets to digest the conflicting newsflow" on the virus in different regions, said Hugh Gimber, global market strategist at J.P. Morgan Asset Management. One positive for the world economy is that local lockdown measures "have had a less striking impact on mobility and spending data than the much more stringent lockdowns earlier in the year, " he said.

Among gainers, Norwegian Cruise Line climbed 3.6%, while JPMorgan Chase advanced 3.2%.

Earnings season for the largest U.S. companies is in its final innings. Shares in International Flavors & Fragrances fell 3.9% after the company reported a 40% drop in operating profits in the second quarter from a year before. Of the 91% of companies on the S&P 500 that had reported by Monday, 82% had beaten analysts' profit forecasts, according to FactSet.

Overseas, the Stoxx Europe 600 jumped 1.7%. Hong Kong's Hang Seng Index snapped three days of losses to rise 2.1%. The increase was driven partly by a rally in shares of Macau casino stocks, which jumped after the semiautonomous territory's government eased quarantine requirements for visitors from mainland China.

Elsewhere, Japan's Nikkei 225 gained 1.9%, while the Shanghai Composite Index lost 1.2%.

--Frances Yoon and Xie Yu contributed to this article.

Write to Joe Wallace at and Sam Goldfarb at


(END) Dow Jones Newswires

August 11, 2020 16:14 ET (20:14 GMT)

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