S&P hits new record as pandemic deepens
Stock indexes are closing at record highs on Wall Street Monday, despite rising coronavirus infections in the U.S. and around the globe, as well as geopolitical concerns in Asia.
The S&P 500 index ended 0.3% higher after having been down as much as 0.7%. The Dow Jones Industrial Average also rose 0.3%, while the Nasdaq composite fell 0.2%. The Russell 2000 index of small company stocks was down 0.6%.
Shares of Tesla fell 4.3% after the U.S. government began investigating the company’s automated driving feature, following a series of collisions with parked vehicles. Oil prices fell and weighed down energy companies.
Investors shifted money into sectors traditionally considered lower risk, including utilities and companies that make food and personal goods. Gains in health care and technology stocks also helped offset a slide in banks, energy companies and elsewhere in the market. The travel sector, retailers and companies that provide in-person services had some of the worst losses.
Stocks have been pushing to ever higher records the past couple of weeks even amid choppy trading as investors try to gauge the impact of rising virus cases. Analysts had expected economic growth to slow from its breakneck pace earlier this year, but the highly contagious delta variant has prompted even more caution from investors.
“Delta is ending up being a cascading concern,” said Sam Stovall, chief investment strategist at CFRA. “It seems the market really doesn’t want to make a commitment for the intermediate or long term.”
The concerns are being heightened as students head back to school or prepare to head back to school at the end of August. School shutdowns because of the virus could crimp a recovery in the job market if parents have to stay home. A resurgence could also stifle the recovery for many businesses that rely on people leaving their homes to eat, shop and get other services.
Shares of Tesla fell 4.7% after the U.S. government announced a formal investigation into the company’s automated driving features, following a series of collisions with parked vehicles.
Data out of China showed the global coronavirus pandemic continues to hurt economies around the world. Chinese industrial production and retail sales both rose last month, but at a far weaker pace than what economists had expected.
China’s economy is suffering from supply chain issues, where manufactured goods that would typically be on their way to foreign markets have either remained unfinished or stuck in shipping containers. The pandemic has made hiring workers harder as well.