MARKET SNAPSHOT: Stock Market Pares Losses As Politics Rattle Wall Street

Extended controversies could further cloud the prospect of legislation seen as market friendly

U.S. stocks pared afternoon losses Tuesday as a pair of political developments dominated the news cycle.

The market had initially turned south before recovering after Donald Trump Jr. released a chain of emails regarding a meeting in June 2016 to discuss allegedly incriminating information about Hillary Clinton as part of the Russian government's support of his father's presidential candidacy.

The Dow Jones Industrial Average rose 23 points, or 0.1%, at 21,432, but earlier had fallen more than 120 points. The S&P 500 lost less than a point to 2,426. The Nasdaq Composite Index was up 13 points, or 0.2%, to 6,190, but also had been down solidly before reversing course.

The emails with publicist Rob Goldstone show that the son of President Donald Trump was told the Russian government had information that would incriminate Clinton (

"Investors may suspect that Donald Trump, Jr., came forward with his meetings with the Russian attorney and released his emails because the FBI investigation may been catching up with him on that issue. The sense was he tried to get in front of it," said Jack Ablin, chief investment officer at BMO Private Bank.

But after a knee-jerk reaction, stocks held their ground and eventually made up much of the deficit, helped by news that the Senate is delaying its summer recess ( until the third week of August to give lawmakers more time to work on key legislative matters such as a health-care bill.

The passage of the health-care bill is viewed as critical in paving the way for other key legislative changes that are at the center of President Donald Trump's pro-growth agenda, including more business-friendly tax codes.

Wall Street has risen firmly this year, with the Dow and S&P 500 both up more than 8% thus far in 2017. The Nasdaq's advance has been sharper, up almost 15%, boosted by an extended rally in large-capitalization technology shares, a sector that has pulled back recently.

Much of the market's postelection rally has come on hopes that the Trump administration would push through legislation on tax reform and spending that could accelerate economic growth and stimulate corporate profits. As a result, investors have been worried that controversies with Russia are seen as making the passage of such initiatives less likely.

"There are legitimate concerns that something could blow up with respect to the Russian scandal, and that could be enough to temper a market that has been moving up," said Bruce McCain, chief investment strategist at Key Private Bank. "It's fair to think that absent any good news on economic fundamentals or on legislation coming out of Washington, that additional worries about scandal can't help the market."

See also:Is Janet Yellen still calling the tune in financial markets? (

Traders are also looking ahead to the start to the next earnings season. Key companies, including such major banks as J.P. Morgan Chase & Co. (JPM) and Citigroup Inc. (C), are scheduled to report on Friday. By and large, financials are expected to post mediocre trading revenue this quarter (

Individual movers: Shares in PepsiCo Inc.(PEP) fell 0.5% despite the producer of snacks and soft drinks posting better-than-expected earnings ( Inc.'s stock (AMZN) slipped 0.4%. The online retailer will be in view as its Prime Day promotion is in full swing on Tuesday.

See:6 money-saving tips for Amazon Prime Day--even if you're not a member (

And read:Amazon is taking away brands' power, throwing another industry into turmoil (

Amicus Therapeutics Inc. (FOLD) surged 27% in heavy trading after the Food and Drug Administration cleared the company to submit a new drug application ( for its Fabry disease treatment.

Halcon Resources Corp.(HK) soared 46% after it agreed to sell its Williston Basin assets ( a unit of Bruin E&P Partners for $1.4 billion in cash.

Other markets: Most Asian markets closed with gains ( on Tuesday, while European stocks ( were largely lower. Oil futures ( moved down after Monday's rally ( Gold futures edged up, and a key dollar index inched higher.

Economic news: A June reading on small-business sentiment arrived before the opening bell, showing a decline ( It's the fifth month in a row without an increase.

Check out:MarketWatch's Economic Calendar (

On the Fed front for Tuesday, Fed Gov. Lael Brainard, speaking at a conference held at Columbia University (, indicated she supports the central bank beginning to reverse its $4.5 trillion balance sheet but wasn't persuaded on more rate increases after that.

--Victor Reklaitis contributed to this article.

(END) Dow Jones Newswires

July 11, 2017 14:50 ET (18:50 GMT)