S&P 500, Dow struggle for direction after three-day rally
(Reuters) – The S&P 500 and the Dow edged lower in choppy trading on Wednesday as a record rise in coronavirus cases in six U.S. states dented sentiment following a three-day rally on hopes of a swift recovery from a coronavirus-driven downturn.
FILE PHOTO: Traders exit the 11 Wall St. door of the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 11, 2020. REUTERS/Brendan McDermid
Arizona, Florida and Oklahoma were among the states that saw a record increase in new coronavirus infections on Tuesday as states pushed ahead with reopening. Beijing extended its movement curbs as it fought the worst resurgence of the disease since early February.
Cruise operator Norwegian Cruise Line Holdings Ltd (NCLH.N) tumbled about 9% as it extended the suspension of its voyages through September end due to the virus outbreak.
Peers Carnival Corp (CCL.N) and Royal Caribbean Cruises Ltd (RCL.N) also dropped about 8% each.
The benchmark S&P 500 .SPX wrapped up its best three-day percentage rise in a month on Tuesday after a report on a massive fiscal stimulus plan, and a stunning retail sales report for May reflected a pickup in demand as businesses reopened.
Encouraging economic data and trillions of dollars in monetary and fiscal stimulus have propelled a rally in the Wall Street indexes from their late-March trough.
The S&P 500 is about 3% below its record closing high hit in February, while the tech-heavy Nasdaq .IXIC was about 1% below its all-time closing high on June 10.
“The market got ahead of itself based on the Fed stimulus,” Matt Peden, chief investment officer at GuideStone Capital Management in Dallas said. “There could be further consolidation in the marketplace, that would be healthy, and would bring stocks closer to a more rational valuation level.”
Federal Reserve Chair Jerome Powell warned on Tuesday that a full recovery is unlikely until the public is confident that the disease is under control, as he testified before U.S. lawmakers. The second day of his virtual hearing will begin at 12 p.m. ET (1400 GMT).
At 9:59 a.m. ET, the Dow Jones Industrial Average .DJI was down 29.86 points, or 0.11%, at 26,260.12, the S&P 500 .SPX was down 2.43 points, or 0.08%, at 3,122.31. The Nasdaq Composite .IXIC was up 31.45 points, or 0.32%, at 9,927.32.
Energy .SPNY and utilities .SPLRCU led losses among the major S&P sectors. Technology .SPLRCT stocks, up 0.5%, provided the biggest boost to the benchmark index.
Oracle Corp (ORCL.N) fell 4% after its quarterly revenue missed estimates as the pandemic led clients in the hospitality, retail and transportation sectors to postpone purchases.
Declining issues outnumbered advancers for a 1.52-to-1 ratio on the NYSE and a 1.16-to-1 ratio on the Nasdaq.
The S&P index recorded nine new 52-week highs and no new low, while the Nasdaq recorded 73 new highs and two new lows.
Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Shounak Dasgupta