By Sam Goldfarb and Joe Wallace
The S&P 500 slipped Tuesday, snapping a seven-session
winning streak, as investors worried about the prospects for a
broad coronavirus relief package.
The index had opened modestly higher and flirted with record
levels for most of the session, before pulling back in the final
hour of trading. It ended the day down 26.78 points, or 0.8%, at
3333.69. The S&P is off just 1.5% from February's high.
The Dow Jones Industrial Average slipped 104.53 points, or 0.4%,
to 27686.91, while the technology-heavy Nasdaq Composite Index slid
185.53 points, or 1.7%, to 10782.82.
Shares of companies that are particularly sensitive to the
direction of the U.S. economy -- such as banks, energy firms,
cruise operators and airlines -- had helped pull indexes higher for
much of the session. Stocks, however, broadly turned lower on
reports that lawmakers remained at an impasse over economic aid
following President Trump's executive actions on jobless benefits
and other relief over the weekend.
"The U.S. fiscal stimulus is absolutely critical to keeping
market momentum positive," said Nicholas Brooks, head of economic
and investment research at Intermediate Capital Group. "Markets are
assuming that ultimately Congress will come through with a package,
and that there's a lot of brinkmanship going on."
"If we don't get a deal, I think markets will correct quite
quickly," he added.
Earlier in the session, investor sentiment had been buoyed after
Mr. Trump said late Monday that he was "very seriously" considering
a cut to capital-gains tax and paring taxes for middle-income
A recent surge in coronavirus cases also continued to show signs
of abating, with the U.S. reporting fewer than 50,000 new cases for
the second day in a row Monday.
Analysts attributed a recent uptick in stocks in beaten-down
sectors partly to the decline in coronavirus cases, as well as a
run of better-than-expected economic data. Those gains, though,
have corresponded with a slide in tech stocks, a reversal of what
has been a hugely popular trade in recent months fueled by a belief
that those companies are relatively shielded from the pandemic's
"It's a very healthy sign that the market has broadened out and
we're not just being led by a handful of stocks," said Bruce
Bittles, chief investment strategist at Baird Co.
There is, he added, a "growing confidence that the economy is
healing maybe a little faster than it was a few months ago and the
second wave of the virus didn't do as much harm as was previously
Signs of a shift in investors' thinking were also reflected in a
tough session for gold and U.S. government bonds -- assets that are
traditionally viewed as havens during times of economic or
The price of gold fell 4.5% to $1,932.60 a troy ounce, its
biggest one-day percentage decline since March. The yield on the
benchmark 10-year U.S. Treasury note rose to 0.657% from 0.573%
Monday, marking its largest increase since June. Yields rise when
bond prices fall.
Investors are still concerned by a pickup in infections in parts
of Europe that had appeared to bring the virus under control.
"It's hard for markets to digest the conflicting newsflow" on
the virus in different regions, said Hugh Gimber, global market
strategist at J.P. Morgan Asset Management. One positive for the
world economy is that local lockdown measures "have had a less
striking impact on mobility and spending data than the much more
stringent lockdowns earlier in the year, " he said.
Among gainers Tuesday, Norwegian Cruise Line climbed 51 cents,
or 3.4%, to $15.64, while JPMorgan Chase advanced $3.18, or 3.2%,
Earnings season for the largest U.S. companies is in its final
innings. Shares of International Flavors & Fragrances fell
$5.26, or 4%, to $125.29 after the company reported a 40% drop in
quarterly operating profits. With results in from more than 90% of
the companies in the S&P 500, about 80% have beaten analysts'
profit forecasts, according to FactSet.
Overseas, the Stoxx Europe 600 jumped 1.7%. Hong Kong's Hang
Seng Index snapped three days of losses to rise 2.1%. The increase
was driven partly by a rally in shares of Macau casino stocks,
which jumped after the semiautonomous territory's government eased
quarantine requirements for visitors from mainland China.
Elsewhere, Japan's Nikkei 225 gained 1.9%, while the Shanghai
Composite Index lost 1.2%.
--Frances Yoon and Xie Yu contributed to this article.
Write to Sam Goldfarb at email@example.com and Joe Wallace at
(END) Dow Jones Newswires
August 11, 2020 17:18 ET (21:18 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.