Wall Street drifts as strong, monthslong rally takes a pause

NEW YORK (AP) — U.S. stocks are drifting in early trading on Tuesday as Wall Street takes a pause following its big rally over the last couple months.

The S&P 500 was down 0.1% after the first 15 minutes of trading, a day after it climbed back within 3% of its record high for the first time since February. The Dow Jones Industrial Average was down 18 points, or 0.1%, at 26,645, as of 9:45 a.m. Eastern time, and the Nasdaq composite was virtually flat.

The market was close to evenly split between rising and falling stocks following a mixed set of earnings reports.

On the winning end was Take-Two Interactive Software, which rose 2.9%. The video-game maker reported even stronger profit growth for the spring than Wall Street expected as customers stuck at home played Grand Theft Auto and other games, which they paid for online.

On the opposite end was insurer American International Group. AIG fell 6% for one of the larger losses in the S&P 500 even though it reported stronger results for the latest quarter than Wall Street expected. Some analysts said the profit report was full of unusual items, such as COVID-related losses, which makes it difficult to extrapolate how AIG’s profits will run from here.

In Washington, meanwhile, negotiators on a big economic relief package reported some progress as their talks resumed in the Capitol. But multiple obstacles remain before a deal can be struck, one that investors say is crucial for propping up the economy in its weakened state.

A weekly $600 in federal unemployment benefits has expired, threatening to crunch the finances of millions of out-of-work Americans. Recent reports have shown an uptick in the number of workers filing for unemployment after a resurgence of coronavirus counts pushed some states to reimpose restrictions on businesses.

The yield on the 10-year Treasury note fell to 0.51% from 0.56% late Monday.

In Europe, stocks dipped to give back a portion of their big gains from a day earlier, when reports showed that manufacturing recovered across much of the continent last month. Germany’s DAX lost 0.7%, and France’s CAC 40 slipped 0.2%. The FTSE 100 in London fell 0.2%.

In Asia, markets were more buoyant. Tokyo’s Nikkei 225 gained 1.7%, the Hang Seng in Hong Kong added 2% and the Kospi in Seoul picked up 1.3%. Stocks in Shanghai edged 0.1% higher.

Benchmark U.S. crude oil slipped 0.8% to $40.68 per barrel. Brent crude, the international standard, lost 1% to $43.69 per barrel.