S&P 500, Dow muted as rising COVID-19 cases dent recovery hopes

By Medha Singh and Devik Jain (Reuters) - The S&P 500 and the Dow edged higher in choppy trading on Wednesday as hopes of a swift recovery from a coronavirus-driven downturn were dented by fears of a record rise in coronavirus cases in six U.S. states. Arizona, Florida and Oklahoma were among the states that saw a record increase in new infections on Tuesday as businesses reopened.

Reuters June 18, 2020 01:05:43 IST
S&P 500, Dow muted as rising COVID-19 cases dent recovery hopes

SP 500 Dow muted as rising COVID19 cases dent recovery hopes

By Medha Singh and Devik Jain

(Reuters) - The S&P 500 and the Dow edged higher in choppy trading on Wednesday as hopes of a swift recovery from a coronavirus-driven downturn were dented by fears of a record rise in coronavirus cases in six U.S. states.

Arizona, Florida and Oklahoma were among the states that saw a record increase in new infections on Tuesday as businesses reopened. Beijing extended its movement curbs as it fought the worst resurgence of the disease since early February.

Cruise operator Norwegian Cruise Line Holdings Ltd declined about 6% as it extended the suspension of its voyages through September end due to the virus outbreak.

Peers Carnival Corp and Royal Caribbean Cruises Ltd also dropped 5.6% and 7.0% each.

The benchmark S&P 500 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 with the easing of lockdowns.

"The market is in a position now where it's priced from an optimistic standpoint and is looking for what's coming up next," said Stan Gregor, chief executive officer of Summit Financial LLC in Parsippany, New Jersey.

Encouraging economic data and trillions of dollars in monetary and fiscal stimulus have powered a rally for the Wall Street indexes from their late-March trough.

The S&P 500 was about 3% below its record closing high hit in February, while the tech-heavy Nasdaq was about 1% below its all-time closing high on June 10.

"There could be further consolidation in the marketplace, that would be healthy, and would bring stocks closer to a more rational valuation level," said Matt Peden, chief investment officer at GuideStone Capital Management in Dallas.

With a complete U.S. economic recovery out of reach until the pandemic is brought under control, the Federal Reserve will use its "full range of tools" to cushion households and businesses, Fed Chair Jerome Powell said during his second day of testimony before U.S. lawmakers.

At 12:49 p.m. ET, the Dow Jones Industrial Average was up 14.27 points, or 0.05%, at 26,304.25, the S&P 500 was up 7.98 points, or 0.26%, at 3,132.72.

The Nasdaq Composite was up 75.12 points, or 0.76%, at 9,970.99 with Apple Inc, Microsoft Corp and Amazon.com providing the biggest boost.

Energy stocks dropped 2%, leading losses among the major S&P sectors.

Oracle Corp fell 4% after its quarterly revenue missed estimates as the pandemic led clients in the hospitality, retail and transportation sectors to postpone purchases.

The U.S. Securities and Exchange Commission told bankrupt Hertz Global Holdings Inc it has issues with the car rental firm's plan to sell new shares, the agency's Chairman Jay Clayton told CNBC on Wednesday.

The company's shares were halted pending news as of 12:49 p.m ET.

Declining issues outnumbered advancers for a 1.26-to-1 ratio on the NYSE and a 1.23-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and no new low, while the Nasdaq recorded 93 new highs and four new lows.

(Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Shounak Dasgupta)

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

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