S&P 500 dips on fears of virus resurgence in economic reopening

By Sinéad Carew New York (Reuters) - The S&P 500 dipped in choppy trading on Tuesday as the top U.S.

Reuters May 13, 2020 01:06:11 IST
S&P 500 dips on fears of virus resurgence in economic reopening

SP 500 dips on fears of virus resurgence in economic reopening

By Sinéad Carew

New York (Reuters) - The S&P 500 dipped in choppy trading on Tuesday as the top U.S. infectious disease expert warned Congress that a premature opening of the nation's economy could lead to additional outbreaks of the novel coronavirus .

Investors were weighing the potential for a second wave of infections against hopes for a reopening of the United States economy by easing stay-at-home restrictions.

Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, told Congress that the virus, which has already killed 80,000 Americans, was not yet under control and that there would not likely be a treatment or vaccine in place by late August or early September.

And reports of new clusters of coronavirus infections in countries such as China, South Korea and Germany where lockdowns had been lifted appear to have added to worries.

Optimism about an economic recovery and massive stimulus measures have already helped the S&P 500 climb about 34% from the March 23 low of the pandemic-driven selloff.

"It goes back to science versus the Federal Reserve. The Federal Reserve has been supportive of the market ... What's going to win here?," said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management in New York.

"From the science view point if we open too quickly, we'll just go back to where we were. But if we don't open at all, we have this economic malaise."

Data showed that U.S. consumer prices dropped by the most since the Great Recession in April, due to a plunge in demand for gasoline and services including airline travel as people stayed home during the coronavirus crisis.

At 2:16PM ET, the Dow Jones Industrial Average <.DJI> fell 137.68 points, or 0.57%, to 24,084.31, the S&P 500 <.SPX> lost 19.31 points, or 0.66%, to 2,911.01 and the Nasdaq Composite <.IXIC> dropped 20.38 points, or 0.22%, to 9,171.96.

Among the S&P's 11 major sectors, real estate <.SPLRCR> was the biggest percentage decliner.

Financial stocks <.SPSY> were one of the biggest laggards with a drop of more than 1.4%.

Helping to drag down that sector lower was a 7% fall in BlackRock Inc , after its top shareholder PNC Financial Services Group Inc said it planned to sell its entire 22% stake in the world's largest asset manager.

Online food delivery company GrubHub Inc surged 35% after a person familiar with the matter said Uber Technologies Inc was in advanced talks to buy the company in an all-stock deal.

Tesla Inc rose 1.8% as President Donald Trump said the electric carmaker should be allowed to reopen its vehicle assembly plant in California.

Declining issues outnumbered advancing ones on the NYSE by a 1.79-to-1 ratio; on Nasdaq, a 1.39-to-1 ratio favored decliners.

The S&P 500 posted nine new 52-week highs and two new lows; the Nasdaq Composite recorded 88 new highs and 21 new lows.

(Additional reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Cynthia Osterman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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