Early this week, technology stocks drove Wall Street’s main indexes higher, but sentiment remained insubstantial as the rise in coronavirus cases globally and other major economies fuelled fears of a setback to the nascent economic recovery.
The World Health Organization (WHO) reported a record rise in global coronavirus cases over the weekend, catapulting demand for perceived safe havens, including gold and longer-term U.S. Treasuries.
Travel-related stocks, one of the worst-hit sectors due to the outbreak continued to fall. The S&P 1500 airlines index dropped 0.7%, while shares of cruise operators Norwegian Cruise Line and Royal Caribbean Cruises both tumbled about 6%.
“On one hand, the bulls have made their case for the fact that the opening up is going much better than expected, yet the bears are looking at the number of cases that are starting to skyrocket,” said Carlton Neel, chief executive officer of investment research firm Chaikin Analytics in Philadelphia.
“There is a risk to the market that we come a long way very quickly. The bulls have a lot to prove here in terms of further gains, in the absence of maybe continued phenomenally good news from retail sales and jobs market.”
The S&P 500 is trading in a tight range of late as several U.S. states, mainly in the West and South, have reported a surge in cases, with Apple Inc’s move to temporarily shut some U.S. stores again on Friday underscoring concerns of a delay in the recovery.
The benchmark index has climbed some 42% from its March lows and the Nasdaq hit a record high earlier this month thanks to trillions of dollars in monetary and fiscal support, the reopening of businesses and improving economic data.
The S&P 500 is now just about 8% off its Feb. 19 record high.
Leading tech companies Apple and Microsoft Corp traded at all-time highs and provided the biggest boost to the three main U.S. stock indexes. Eight of the 11 major S&P sectors were higher.
At 12:54 p.m. ET, the Dow Jones Industrial Average was up 137.79 points, or 0.53%, at 26,009.25, the S&P 500 was up 18.53 points, or 0.60%, at 3,116.27. The Nasdaq Composite was up 89.37 points, or 0.90%, at 10,035.49.
U.S.-based meat processor Tyson Inc slipped 2.9% as China’s customs authority suspended imports of poultry products from a plant owned by the company that had been hit by the coronavirus.
American Airlines Group Inc fell 6.6% as it planned to secure $3.5 billion in new financing by selling shares and convertible senior notes to boost liquidity.
Virgin Galactic Holdings Inc soared 13.7% as it signed up with NASA to develop a program to promote private missions to the International Space Station.
Advancing issues outnumbered decliners by a 1.14-to-1 ratio on the NYSE and by a 1.21-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and no new low, while the Nasdaq recorded 101 new highs and six new lows.
Reported by Medha Singh