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S&P 500 and Nasdaq end lower after sharp drop in tech titans

Published 07/13/2020, 07:00 AM
Updated 07/13/2020, 06:41 PM
© Reuters. The spread of the coronavirus disease (COVID-19) in New York

© Reuters. The spread of the coronavirus disease (COVID-19) in New York

By Noel Randewich

(Reuters) - The S&P 500 and Nasdaq ended lower on Monday, pulled down by Amazon, Microsoft and other recent big-name leaders of Wall Street's recent rally.

The S&P 500 dipped after briefly touching its highest level since Feb. 25. The index has rebounded over 40% since mid-March, even as COVID-19 infections rose rapidly in Arizona, California and Texas and about 35 other states.

Stocks that outperformed in recent months, including Amazon (O:AMZN), Microsoft (O:MSFT), Nvidia (O:NVDA) and Facebook (O:FB), ended down more than 2% after gaining earlier in the day.

Selling accelerated after California Governor Gavin Newsom ordered a massive retrenchment of the state’s reopening, shutting bars and banning indoor restaurant dining statewide and closing churches, gyms and hair salons in hardest-hit counties.

"The rally's been driven by a handful of names. You've had headlines about COVID and layoffs and the economy. It's finally caught up with these names everybody's been hiding in," said Michael O'Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

Tesla (O:TSLA) dropped 3.1% after surging 16% earlier in the session. The electric car maker's stock has been on a blistering rally over the past two weeks as investors bet the electric car maker could report a quarterly profit and potentially join the S&P 500.

Shares of German biotech firm BioNTech (O:BNTX) jumped over 10% and Pfizer Inc (N:PFE) climbed 4% as two of their experimental coronavirus vaccines received the U.S. FDA's "fast track" designation.

Merger news also perked up investors as chipmaker Analog Devices Inc (O:ADI) announced a $21 billion deal to buy rival Maxim Integrated Products Inc (O:MXIM), sending its stock 8% higher. Analog shares fell 5.8%.

PepsiCo Inc (O:PEP) gained 0.3% after it said it benefited from a surge in at-home consumption of salty snacks such as Fritos and Cheetos during lockdowns.

The Cboe Volatility Index (VIX), Wall Street's fear gauge, closed at its highest level since June 26. Its 4.9-point gain for the session was its largest since June 11.

Investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the financial crisis, according to IBES Refinitiv data. Results from big banks will be in focus this week.

For a graphic on S&P 500 versus financials: widest gap since GFC, click https://fingfx.thomsonreuters.com/gfx/mkt/jbyvrrwjave/SPX%20versus%20financials.png

The Dow Jones Industrial Average (DJI) rose 0.04% to end at 26,085.8 points, while the S&P 500 (SPX) lost 0.94% to 3,155.22.

The Nasdaq Composite (IXIC) dropped 2.13%, to 10,390.84.

The S&P 500 technology index (SPLRCT) fell 2.12%, leading declines.

Recent economic data has strengthened belief that the stimulus-pumped U.S. economy is on the road to recovery, helping investors look past a recent spike in U.S. infections.

Declining issues outnumbered advancing ones on the NYSE by a 1.56-to-1 ratio; on Nasdaq, a 2.11-to-1 ratio favored decliners.

The S&P 500 posted 38 new 52-week highs and no new lows; the Nasdaq Composite recorded 128 new highs and 22 new lows.

© Reuters. The spread of the coronavirus disease (COVID-19) in New York

Volume on U.S. exchanges was 11.6 billion shares, compared with the 11.9 billion average for the full session over the last 20 trading days.

Latest comments

I wonder how long will if take s&p 500 to recover
Do you think Nas will continue to decline... Seen a huge drop? Thoughts on this?
Jump? or dive?... maybe plunge
If you think that the vaccine is the solution your future will be a disillusionment.
Hey Eddie! You need to chill , drink an ice cold Corona and be glad you're not sick!! Wether you like it or not, Coronavirus is real!! 140,000 dead Americans!!! People in my circle are starting to come up sick. This disease is ugly. Two people I know have been left with no sense of taste or smell. Another has been left with 25% lung capacity. Stop telling people this disease is fictitious. I know we have to work. How 'bout we embrace masks and sanitizer?
there has been a new viral pandemic every 2-5 years for at least the last century...this one just being used because democrats are worried about november. the only cause for high hospitalizations/reported death rate initially was due to democrats in states like NY who were shoving elderly people into nursing homes that resulted in nearly 1/3 of the deaths in the US. the death rate plummeted after that. also federal subsidies were given to hospitals/states for diagnosis of COVID-1984. notice how heart attacks and strokes and other causes of death seemed to have magically disappeared the first few months, and now that they are being listed as cause of death again covid deaths have magically disappeared.
there have been multiple reports of people who were told family members died of COVID-19, who requested post-mortem testing and were found to have not been infected by covid. interesting how that seems to have started happening after government offered additional money for healthcare facilities and states for each covid case.
can check out some of the reporting on project veritas about corruption in NY heatlhcare reporting of COVID cases.
all these "cases" are mostly asymptomatic people detected with mandatory return to work resting, many of them already immune (since the common test being used cannot tell active cases from resolved cases). the vaccines coming out are around $2000/doses and under 40% effective. for reference,initial death rates of COVID-1984 found to be falsely elevated, and for the majority of the population even the common flu is more deadly. the common flu last year killed around 500,000 people globally, and the vaccine was only 30% effective. also for reference, motor vehicle accidents ******1.3 people per year globally, and is one of the top causes of death of children. yet nobody seems to have any problem driving cars.
*return to work
i wondering what they will say when the market. will collapse again. SPX and DJI made already a top in monthly chats in June 30
didn't they release this same strategy on fri? man, they have to get more creative
nobody cares, COVID-1984 game over. misleading and false information about initial death rates to fearmonger exposed. keep spamming this site with headlines showing how many asymptomatic and immune people there are.
HEADS UP! They're buying the VIX!!
LOL! OH, I'M DYING FROM LAUGHING HERE! LOL! PLEASE KEEP THE COMEDY GOING, I RATHER DIE FROM LAUGHTER THAN COVID-19
Why give reasons anymore why the market is rising Friday you guys gave a doom and gloom story.
The market is optimistic of a fast recovery. Corona is over, time for massive earnings up dates.
1000 dying everyday.. everyday... hopes?
you've been brainwashed
Sir y are brainwashed by media
They add dying at an alarming rate. infections are on the rise and Hope and Optimism have taken over the fundamentals of Economy 101. Insanity at a level that no one could have ever imagined.
I find it funny that if covid had not happened and the so called booming economy was still in full force these tech stocks would be nowhere near where they are now. People you do know goldman and JP put price targets out to fool you just for their profits?
Bubble grows
people like you will lose all your money
The real world so different millions in unemployment, printed money billions .... this virtual bubble will burst when ugly to see ...
so do yall think it will go back down soon? looking like a pump fake to me
It could dump if banks honestly report what's happening. 30% default in mortgages. Etc. I'm waiting for S&P report. Worst quarter since the Great Recession.
so do yall think this is a pump fake? i think it will drop big time
Yeah, and Red Bull gives you wings (after you die).
Flu vaccine and Cancer detector...Alchemy of sorcerer's stone..
People drinking more soda and hoping for a vaccine just sounds really strange
Interesting headline. Whenever stocks are going up, its because vaccine hope. When down its because virus fears...I dont need a headline that tells me the reason why stocks go up or down. Rather tell me before(!) the actual stock move, what is the reason (whichever one of the two) going to cause the market to go up or down. Otherwise, senseless rationalization of “ oh its because ********that caused the stocks to go up/down” is useless.
so true...
No more downfall. It's over. only retracement to 20 ema. Read the day candles.
caffeine and sugar high
and don't forget coca cola and 7up boost, yummy!!
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