Stocks - Dow Falls as Tech Runs out of Steam; Fauci Warns on Reopening too Soon

By Yasin Ebrahim

Investing.com – The Dow fell on Tuesday as the rally in tech stocks cooled and worries that some states are lifting restrictions too soon weighed on sentiment.

The Dow Jones Industrial Average fell 0.62%, or 151 points, the S&P 500 fell 0.65%, while the Nasdaq Composite slipped 0.22%.

Investor optimism over the reopening of the economy remained cautious as White House health advisor Dr. Anthony Fauci told Congress that the virus is not under control yet and raised concerns that some states are reopening businesses too soon, which may lead to further Covid-19 outbreaks.

The warning comes as data from the White House coronavirus task force showed a spike in new infections in the past week, NBC reported, citing leaked data.

As the toll of U.S. coronavirus deaths topped 82,000, with as many as 1.4 million infected, investor focus on drugmakers' efforts to find Covid-19 therapies and vaccines has intensified.

Gilead Sciences (NASDAQ:GILD) and Moderna (NASDAQ:MRNA), the front runners in the race to find Covid-19 treatments, gave up some of their gains from a day earlier, keeping a lid on gains in the broader healthcare sector.

Technology, meanwhile, pared gains to trade roughly unchanged, with the bulk of FAANG turning negative.

Google-parent Alphabet (NASDAQ:GOOGL) fell 0.58% even as Citigroup upgraded its price on the tech giant to $1,600 From $1,400.

Financials, mostly banks, came under pressure as President Donald Trump exacerbated worries about a negative interest rate environment after calling on the Federal Reserve to deliver deeper interest rate cuts.

Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) were down more than 2%.

Trump has been a vocal critic of Fed Chairman Jerome Powell and expressed frustrations that the central bank had upped rates too quickly and subsequently trimmed rates too slowly.

The call on the Fed to cut more comes as the central bank got its historic corporate bond-buying program underway -- a move announced in March to avert a credit crisis.

On the economic front, investors continued to digest further evidence the U.S. economy is in crisis as core inflation, which excludes food and energy, recorded consecutive month-on-month declines for only the second time in the series' 63-year history. The last time was 1982, ING said.

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In deal news. meanwhile, Grubhub (NYSE:GRUB) surged more than 30% on reports that Uber Technologies (NYSE:UBER) had tabled an offer for the company, The company issued a statement that did not confirm talks, but said it was always look at ways to increase shareholder value.