Dow, S&P 500 tumble as investors worry of coronavirus return

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The S&P 500 and Dow Jones Industrials gave back some of last week’s gains on Monday, as investors worried about the possibility of a second wave of coronavirus infections with the reopening of several economies.

Germany and South Korea reported a surge in new COVID-19 cases on Sunday, in an ominous sign for all countries beginning to lift virus lockdowns.

Ten of the 11 major S&P sectors were lower, with a 2.2 percent decline in financials weighing the most on the S&P 500. It was down 7.28 points, or 0.25 percent, at 2,921.95 in noon-time trading

Financial stocks tend to lag when the economic outlook darkens.

Technology and health care, the best performing sectors this year, were the only two in the positive territory.

“There is concern that perhaps we had gotten ahead of ourselves a little bit over the last couple of weeks,” said Art Hogan, chief market strategist at National Securities in New York.

“Things are just going to stagnate here a bit as we consider how long it will actually take to get back in business and what kind of activity we see in front of us.”

The battered S&P 1500 airlines index declined 4.6 percent, while cruise operators Carnival Corp and Norwegian Cruise Line Holdings Ltd fell 3.3 percent and 6.5 percent, respectively.

Marriott International shed 6.1 percent after the hotel operator’s quarterly profit fell short of already drastically lowered expectations as bookings plunged.

The Nasdaq, however, edged higher as gains for tech-related stocks helped it build on a rally last week where it recovered all its 2020 losses on hopes of a pickup in business activity.

The tech-heavy index is now just 7 percent below its February record high, but analysts have warned of another selloff as macroeconomic data gets worse, foreshadowing a deep and lasting global recession.

“We think it’s likely a stretch for investors to chase the move much higher from here,” said Eoin Murray, head of investment at Federated Hermes.

After financial markets began pricing in negative US interest rates for the first time ever last week, all eyes will be on Federal Reserve Chair Jerome Powell’s outlook on the economy at a webcast event on Wednesday.

At 12:00 p.m. ET, the Dow Jones Industrial Average was down 148.08 points, or 0.61 percent, at 24,183.24, the S&P 500 was down 16.49 points, or 0.56 percent, at 2,913.31.

The Nasdaq Composite was up 41.15 points, or 0.45 percent, at 9,161.15.

Drug distributor Cardinal Health jumped 5.2 percent as the pandemic drove a surge in third-quarter sales, which topped market estimates.

Athletic apparel maker Under Armour slumped 11.1 percent after it forecast a 50 percent to 60 percent drop in second-quarter revenue, while General Mills rose 0.9 percent after it said it expects to surpass its own expectations for fiscal 2020 organic sales.

Declining issues outnumbered advancers for a 3.21-to-1 ratio on the NYSE and a 1.70-to-1 ratio on the Nasdaq.

The S&P index recorded 12 new 52-week highs and one new low, while the Nasdaq recorded 65 new highs and five new lows.

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