Stocks take ‘pause’ after rallying
Concern for another surge in virus infections tempers enthusiasm.
Stocks ended broadly lower on Wall Street Tuesday as trading turned wobbly a day after the market notched its biggest jump in more than five weeks.
The S&P 500 fell 1% after having been up by 0.4% in the early going. Losses in banks, health care stocks and household goods companies accounted for a big portion of the selling. A late-day slide erased early strength in technology stocks and companies that rely on consumer spending.
Bond yields mostly fell and the price of gold rose, signs that investors were feeling cautious.
“Today is a little bit of a pause day after a significant rally,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.
Investors are betting that the economy and corporate profits will begin to recover from the coronavirus pandemic as the U.S. and countries around the world slowly open up again. However, concerns remain that the relaxing of stay-at-home mandates and the reopening of businesses could lead to another surge in infections, potentially ushering in another wave of shutdowns.
The S&P 500 lost 30.97 points to 2,922.94, snapping a three-day winning streak. The Dow Jones Industrial Average fell 390.51 points, or 1.6%, to 24,206.86. The Nasdaq composite dropped 49.72 points, or 0.5%, to 9,185.10. The
Russell 2000 index of small-company stocks gave up 25.97 points, or 1.9%, to 1,307.72.
Wall Street kicked off the week with a bang, as optimism about a potential vaccine for COVID-19 and hopes for a U.S. economic recovery in the second half of the year pushed stocks sharply higher Monday, reversing all of the market’s losses so far this month. Tuesday’s selling cut into some of those gains. The S&P 500 is now down 13.7% from its alltime high in February.
Meanwhile, quarterly results from big retailers Tuesday underscore the challenges companies face as long as the outbreak weighs on consumers and compels government officials to mandate restrictions on commerce. Companies that have been able to remain open or effectively amplify their e-commerce business have been able to fare far better than those that have had to temporarily close doors.
Walmart reported a 74% surge in fiscal first-quarter sales as people stocked up on crucial supplies while sheltering in place. Its earnings fell as it spent $900 million in additional compensation for workers, but still topped Wall Street’s forecasts.