Stocks close down as Congress clashes over COVID-19 relief bill

Stock markets closed lower on Tuesday as Democrats and Republicans worked to hash out details of the next COVID-19 relief bill.

The Dow Jones Industrial Average fell 205 points, or 0.8 percent, and the S&P 500 dropped 21 points, or 0.7 percent.

Senate Republicans on Monday unveiled a $1 trillion proposal that would reduce unemployment insurance, provide a new round of stimulus checks and extend the Paycheck Protection Program.

Democrats, who in May passed a $3 trillion bill, said the cuts to unemployment would be catastrophic and pushed to include funding for cash-strapped state and local governments.

Several provisions in the last package, including expanded unemployment benefits and a moratorium on some evictions, have already expired. A compromise is not expected until early to mid-August.

The drops also follow new data showing a decline in consumer confidence since June. Because consumer spending accounts for more than two-thirds of the economy, drops in confidence portend badly for economic growth.