Gold at all-time high as markets slump again

Stocks closed broadly lower for the second day in a row Friday as Wall Street gave back some of its gains from a mostly solid July rally.

The S&P 500 fell 0.6% and ended the week with its first weekly loss in four weeks. The pullback, which eased somewhat by afternoon, came as traders turned cautious amid increased tensions between the world’s two largest economies and a mixed batch of company earnings reports.

Technology and health care companies accounted for much of the selling, with chipmaker Intel posting the biggest drop in the S&P 500. Those losses outweighed gains by companies that rely on consumer spending, including Olive Garden owner

Darden Restaurants, homebuilder PulteGroup and retailers Target and Best Buy. Stocks also sank across Asian and European markets.

Cautious investors shifted money into gold, driving its price to an all-time high of nearly $1,900 an ounce. The last record high for gold was set in 2011. Treasury yields held relatively steady, but remain close to their lowest levels since April.

“Investors are already wondering whether prices are too high and then you get a little bit of tension with China, you get a little bit of disappointing news from Intel, and that just sort of feeds on itself,” said Mike Zigmont, director of trading and research at Harvest Volatility Management.

The S&P 500 dropped 20.03 points to 3,215.63. The Dow Jones Industrial Average slid 182.44 points, or 0.7%, to 26,469.89. The Nasdaq composite fell 98.24 points, or 0.9%, to 10,363.18.

Each of the indexes had been down more sharply in the morning, with the Nasdaq off by as much as 2.3%. Small company stocks were the biggest losers. The Russell 2000 index gave up 22.65 points, or 1.5%, to 1,467.55.

The coronavirus pandemic remains the most dominant force in markets, with its potential to destroy lives and economies. But other risks are also bubbling up, headlined by Friday’s worsening relations between the United States and China.

Investors are also concerned about a recent uptick in layoffs as spiking coronavirus counts across the Sun Belt lead more businesses to shut down.

SOURCE: Federal Reserve Bank of New York