Market Report

Stocks dip as spikes in virus give investors pause

An electronic stock board showing Japan's Nikkei 225 index at a securities firm is seen at a street in Tokyo Wednesday, June 17, 2020. Major Asian stock markets declined Wednesday after Wall Street gained on hopes for a global economic recovery and Japan's exports sank. (AP Photo/Eugene Hoshiko)
An electronic stock board showing Japan's Nikkei 225 index at a securities firm is seen at a street in Tokyo Wednesday, June 17, 2020. Major Asian stock markets declined Wednesday after Wall Street gained on hopes for a global economic recovery and Japan's exports sank. (AP Photo/Eugene Hoshiko)

NEW YORK -- Stocks mostly fell in another day of wobbly trading on Wall Street Wednesday, as markets eased off the accelerator following their big rally.

The S&P 500 dipped 0.36% to break a three-day winning streak, after bouncing between small gains and losses for much of the day. Stocks in Asia and Europe made modest gains, while Treasury yields edged lower.

Markets have been trending upward this week amid hopes that the worst of the recession may have already passed, and a worldwide rally on Tuesday carried the S&P 500 back to within 8% of its record. But rising levels of coronavirus infections in several hot spots around the world is also raising concerns that all the improvements could get upended.

The S&P 500 fell 11.25 points to 3,113.49 Wednesday, with roughly seven out of every 10 stocks in the index down. The Dow Jones Industrial Average lost 170.37, or 0.65%, to 26,119.61. The Nasdaq composite was an outlier and rose 14.66, or 0.15%, to 9,910.53.

[CORONAVIRUS: Click here for our complete coverage » arkansasonline.com/coronavirus]

Many professional investors have been warning that the S&P 500's big rally of nearly 40% since late March has been overdone and that volatility is likely the market's only certainty in upcoming months.

Norwegian Cruise Line Holdings had six straight days this month where it rose or fell more than 10%.

It said late Tuesday that it's cancelling most of its voyages through September. Its shares fell 8.4% for one of the largest losses in the S&P 500.

The chief risk for the market lies in rising infection levels in several hot spots around the world, including Florida, Texas and China. Even if authorities don't reinstate widespread lockdowns, the worry is that businesses and consumers could get frightened by new waves of infections and pull back on their spending.

Such worries rocked the market last week, sending the S&P 500 down nearly 6% one day, and they've continued to hang in the background this week.

"Any indication that there is an increase in a handful of states that have led the charge in reopening does kind of douse the flames a bit for a rally," said Nela Richardson, investment strategist at Edward Jones. "We saw that last week and we may be seeing that again today, though definitely not the same dramatic swing we saw last week."

While cruise lines had some of the sharpest losses in the S&P 500, other companies whose profits are closely tied to the strength of the economy were also weak.

Energy companies in the S&P 500 fell 3.3% for the largest loss among the 11 sectors that make up the index. Banks were also laggards, with JPMorgan Chase down 2.5% and Bank of America down 3.1%.

Stocks of smaller companies were weak, which is typical when investors are apprehensive about the economy. The Russell 2000 index of small-cap stocks fell 1.77%.

On the winning side were some home builders after a report showed that construction rebounded following months of sharp declines because of shutdowns. D.R. Horton rose 0.9%.

The growth in housing activity, though, was not as strong as economists expected and another sign of the long road to full recovery.

Big technology companies made modest moves higher, including a 0.3% rise for Microsoft. Because these are the biggest companies in the S&P 500, their movements have bigger sway on the index and helped to limit the losses.

The yield on the 10-year Treasury fell to 0.72% from 0.75% late Tuesday. It tends to move with investors' expectations for the economy and inflation.

A barrel of U.S. crude oil for delivery in July slipped 42 cents to settle at $37.96. Brent crude, the international standard, slipped 25 cents to $40.71 per barrel.

Men walk in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, June 17, 2020. Major Asian stock markets declined Wednesday after Wall Street gained on hopes for a global economic recovery and Japan's exports sank. (AP Photo/Eugene Hoshiko)
Men walk in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, June 17, 2020. Major Asian stock markets declined Wednesday after Wall Street gained on hopes for a global economic recovery and Japan's exports sank. (AP Photo/Eugene Hoshiko)
A man walks past an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, June 17, 2020. Major Asian stock markets declined Wednesday after Wall Street gained on hopes for a global economic recovery and Japan's exports sank. (AP Photo/Eugene Hoshiko)
A man walks past an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, June 17, 2020. Major Asian stock markets declined Wednesday after Wall Street gained on hopes for a global economic recovery and Japan's exports sank. (AP Photo/Eugene Hoshiko)
A man walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, June 17, 2020. Major Asian stock markets declined Wednesday after Wall Street gained on hopes for a global economic recovery and Japan's exports sank. (AP Photo/Eugene Hoshiko)
A man walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, June 17, 2020. Major Asian stock markets declined Wednesday after Wall Street gained on hopes for a global economic recovery and Japan's exports sank. (AP Photo/Eugene Hoshiko)

Upcoming Events