Stocks end bumpy day lower after Trump virus test
Wall Street’s major stock indexes fell on Friday after President Donald Trump tested positive for the coronavirus, but the losses ended up milder than investors braced for early in the morning.
The S&P 500 slumped 1.7 percent as soon as trading began, only to churn through another turbulent session. By the end of the day, it had trimmed its loss to 1 percent, down 32.38 points at 3,348.42. Despite the drop, most of the stocks in the index were higher, and the S&P 500 still managed to close out its first winning week in the last five.
The paring of losses came as optimism rose that Washington may be able to get past its partisanship to deliver more support for the economy. House Speaker Nancy Pelosi told airlines in the afternoon to stop furloughing workers because aid for them is imminent. She said a wider rescue package for the economy, one that investors have long been agitating for, could also perhaps be on the way.
The Dow Jones Industrial Average swung from a loss of 433 points to a gain of 44 points through the day. It ended at 27,682.81, down 134.09 points, or 0.5 percent.
Big technology stocks remained weak, and the Nasdaq composite fell 251.49, or 2.2 percent, at 11,075.02. It’s a sharp departure from much of the summer, when Big Tech stocks carried the market higher. The tech slump was also the main reason for the S&P 500’s drop.
Treasury yields ticked higher, though, and smaller stocks were also stronger than the rest of the market in a sign of optimism. The Russell 2000 index of small-cap stocks gained 8.09, or 0.5 percent, to 1,539.30.
Earlier Friday, markets appeared set for a much uglier day. Stock futures and Treasury yields tumbled after Trump tweeted overnight that he and First Lady Melania Trump had tested positive for COVID-19.
Analysts said some of the market’s movements could be explained by investors building up expectations for a Joe Biden victory of the White House, with Election Day a little more than a month away. That could mean higher tax rates and tighter regulations on companies, which would limit profits and hurt stock prices, though it could also raise the odds of more stimulus for the economy.
“To say this potentially could be a big deal is an understatement,” Rabobank said in a commentary. “Anyway, everything now takes a backseat to the latest incredible twist in this U.S. election campaign.”
After the market closed, the White House announced that Trump was “fatigued” and will spend a “few days” at a military hospital on the advice of his physicians. The announcement said that the visit is precautionary and that Trump will work from the hospital’s presidential suite.
The White House also said Trump had been injected with an experimental antibody drug combination for the virus made by Regeneron. The company’s shares rose 3 percent in after-hours trading.