Dow, S&P 500 fall on fears over virus resurgence but Nasdaq ends at record high
Reuters
Published Jul 09, 2020 06:52AM ET
Updated Jul 09, 2020 05:41PM ET
By Caroline Valetkevitch
(Reuters) - The S&P 500 and Dow dropped on Thursday as investors worried about another round of business shutdowns to contain a surge in coronavirus cases and began to shift their focus to earnings, while the Nasdaq hit another record closing high.
The United States saw more than 60,000 new COVID-19 infections on Wednesday, setting a single-day global record while Florida and Texas reported a record one-day increase in deaths.
Investors also began to turn their focus to the second-quarter earnings season, which shifts into higher gear next week. S&P 500 companies are expected to post a more than 40% decline in year-over-year earnings, which would be the biggest quarterly profit drop since the 2008 financial crisis, based on IBES data from Refinitiv.
Walgreens Boots Alliance Inc (O:WBA) shares dropped after it reported a quarterly loss compared with a profit a year earlier, hurt by non-cash impairment charges of $2 billion as COVID-19 disrupted business at its Boots UK division. Its stock closed 7.8% lower.
"We're heading into earnings season, and you're seeing some troubling trends," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
"I expect a lot of confusing numbers and guidance. COVID is certainly not behind us in any way, shape or form, so maybe the V gets elongated some," he said.
The Nasdaq registered its fifth record closing high in six days, helped by gains in Amazon.com (O:AMZN), Microsoft Corp (O:MSFT), Nvidia (O:NVDA), Apple Inc (O:AAPL). Also, Tesla (O:TSLA) extended recent gains, ending up 2.1%.
The Dow Jones Industrial Average (DJI) fell 361.19 points, or 1.39%, to 25,706.09, the S&P 500 (SPX) lost 17.89 points, or 0.56%, to 3,152.05 and the Nasdaq Composite (IXIC) added 55.25 points, or 0.53%, to 10,547.75.
The benchmark S&P 500 is still up more than 40% from its March 23 closing low.
Helping stocks early in the day was data showing the number of Americans filing for jobless benefits dropped to a near four-month low last week. A record 32.9 million people though were collecting unemployment checks in the third week of June.
A batch of upbeat economic data including the record pace of job additions in June has underscored that the stimulus-fueled domestic economy was on the path to recovery.
In a bullish signal for near-term momentum, the benchmark S&P 500's chart formed a "golden cross" pattern, in which its 50-day moving average vaulted above the 200-day moving average.
Declining issues outnumbered advancing ones on the NYSE by a 2.56-to-1 ratio; on Nasdaq, a 2.19-to-1 ratio favored decliners.
The S&P 500 posted 33 new 52-week highs and one new low; the Nasdaq Composite recorded 117 new highs and 33 new lows.
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Volume on U.S. exchanges was 10.73 billion shares, compared with the 12.23 billion average for the full session over the last 20 trading days.
Written By: Reuters
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