Stocks rolled over on Tuesday as investors fretted over the timing of potential fiscal stimulus to curb slower economic growth stemming from the coronavirus outbreak.
The Dow Jones Industrial Average traded 122 points lower, or 0.5%. Earlier in the day, the 30-stock average was up 945 points. The S&P 500 was down 0.4% after jumping 3.7%. The Nasdaq Composite advanced as much as 3.8% before trading 0.2% lower.
President Donald Trump floated on Monday the idea of “a payroll tax cut or relief” to offset the negative impact from the coronavirus. The potential tax incentives come on top of an $8.3 billion spending package Trump signed last week. However, administration officials told CNBC that the White House is not close to rolling out specific proposals to deal with a coronavirus-induced economic slowdown.
“While we believe that a fiscal stimulus package will be produced, the timing and scope remain uncertain,” said Ed Mills, Washington policy analyst at Raymond James, in a note. “When asked about the potential for a fiscal package, some Republican leaders on the Hill signaled that they believe these actions to be premature and key Congressional Democrats arguing that there are more immediate priorities over tax cuts and plan to introduce their own package in coming days.”