NEW YORK (AFP) - Wall Street closed lower on Tuesday (Dec 29) after the Senate blocked a move to boost federal stimulus cheques to US$2,000 (S$2,600), sending indices retreating from records set the day before.

Much of Monday's upbeat sentiment came after President Donald Trump's signed into law a US$900 billion stimulus package that extends unemployment programmes helping people during the pandemic, as well as US$1.4 trillion budget to fund the government.

The president had called for an increase the next round of stimulus payments from the US$600 maximum set in the Bill, and the House of Representatives approved a measure to do that.

But on Tuesday, Republican Senate Majority Leader Mitch McConnell blocked that change and Wall Street, which started the day in positive territory, dialed back its gains.

The benchmark Dow Jones Industrial Average finished 0.2 per cent lower at 30,335.67, while the broad-based S&P 500 also lost 0.2 per cent to finish at 3,727.04.

The tech-rich Nasdaq Composite Index dropped 0.4 per cent to 12,850.2 at the close.

Boeing shares rose 0.1 per cent after its 737 Max jet returned to commercial service in the United States with an American Airlines flight between Miami and New York, ending a nearly two year grounding after a pair of deadly crashes.

Apple fell 1.3 per cent after a federal judge dismissed its copyright infringement lawsuit against a cybersecurity startup in a ruling that could limit Apple's efforts to exercise full control of its iPhone software and its ability to force third parties to use its proprietary security research tools.