Wall Street Opens Lower in Modest Correction; Dow Down 39 Points

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Investing.com — U.S. stock markets opened modestly lower on Tuesday, correcting a little after posting their strongest day in three months on Monday.

By 9:55 AM ET (1455 GMT), the Dow Jones Industrial Average was down 39 points, or 0.1%, while the S&P 500 was down 0.2% and the Nasdaq Composite was down 0.6%.

The most prominent moves came in technology where Zoom Video Communications (NASDAQ:ZM) stock rose 3.1% after posting quarterly results late on Monday that were much stronger than expected. By contrast, the ADRs of Chinese electric vehicle maker Nio (NYSE:NIO) fell over 7% after an update that showed widening losses. 

The market remains broadly supported by the passage of the $1.9 trillion stimulus package through Congress. The bill is being picked up by the Senate shorn of its provisions for a $15 national minimum wage, in order to ensure that it can pass quickly, without the need for support from Republican Senators.

The rotation into cyclical stocks continued, with chemicals giant LyondellBasell  (NYSE:LYB) stock hitting a new three-year high for the third day in a row.

Elsewhere, Hertz Global Holdings (OTC:HTZGQ) stock fell 22% after the company received a $4.2 billion proposal to buy it out of bankruptcy from two private equity groups, Knighthead Capital Management and Certares Management. The proposal, which values the group’s equity at $2.3 billion, will need the approval of bondholders to convert $1.9 billion in outstanding claims into equity. The offer is an epilogue to one of the flashes of irrational exuberance shown by retail investors last year, who pushed the stock as $6.25 – five times its current level – as it fell into bankruptcy.

Kohls (NYSE:KSS) stock rose 1.0% after the department store chain said it would restart dividends and buybacks, while Target (NYSE:TGT) stock rose 2.6% after after the retail giant beat estimates for holiday quarter sales, powered by the company’s same-day delivery and store pick-up services.

Financial stocks picked up again after a wobble in recent days over concerns that Senate Democrats, led by Senator Elizabeth Warren, could pressure the Federal Reserve into reversing the relaxation of capital requirements that it allowed in the first phase of the pandemic. Bank investors have feared that the Supplementary Leverage Ratio could be restored as a binding constraint on bank balance sheets, restricting their ability to buy back stock and pay dividends.