Benchmarks closed lower on Tuesday giving up early gains led by selloff in tech shares. Investors also gauged the outlook of the US economy amid slowdown in coronavirus cases and lack of progress in coronavirus relief package.
The Dow Jones Industrial Average (DJI) slid 104.53 points or 0.4%, to close at 27,686.91 and the S&P 500 fell 26.78 points or 0.8% to close at 3,333.69. The Nasdaq Composite Index closed at 10,782.82, shedding 185.53 points or 1.7%. The fear-gauge CBOE Volatility Index (VIX) increased 8.6%, to close at 24.03. Declining issues outnumbered advancing ones for 1.05-to-1 ratio on the NYSE and a 1.52-to-1 ratio on the Nasdaq favored decliners.
How Did the Benchmarks Perform?
The Dow’s biggest gainers were JPMorgan Chase & Co. JPM and American Express Company AXP rising 3.2% and 1.6%, respectively. While a nearly 3% decline in Apple Inc. AAPL was the blue-chip index’s biggest drag. Apple sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Of the 11 major sectors of the S&P 500, only financials and industrials sectors closed in the green and a drop of at least 1.7% in utilities, real estate and technology weighed down the broader index. The tech-laden Nasdaq plunged as tech giants like Amazon.com, Inc. AMZN, Facebook, Inc. FB, Microsoft Corporation MSFT and Netflix, Inc. NFLX declined at least 2%, while Advanced Micro Devices, Inc. AMD closed 6.6% lower on Tuesday.
Overall, the S&P 500 posted 45 new 52-week highs and no new lows, while the Nasdaq Composite recorded 97 new highs and 14 new lows.
Stimulus Package Uncertainties Continue
On Tuesday, investors struggled to assess the uncertainty of further coronavirus stimulus package intended to support Americans battling out the pandemic. On Monday, the Democratic lawmakers had indicated that they were ready to resume talks on a coronavirus aid package. Over the weekend, President Donald Trump had sighed four executive orders to extend some coronavirus aid. The aid now includes unemployment benefits, a payroll tax holiday, defer student loan payments through 2020 and to extend federal eviction protections.
On Monday, Treasury Secretary Steven Mnuchin had said that the houses were resuming coronavirus aid talks and put more relief money on the table to reach a compromise, but Senate Majority Leader Mitch McConnell said on Tuesday that negotiations with Democrats were at a stalemate.
Russia’s Covid Vaccine Candidate Raise Optimism
Earlier on Tuesday, Russian President Vladimir Putin announced the registration of the world’s first Covid-19 vaccine. Putin also claimed that his daughters had already taken the vaccine without completing Phase 3 trials. Additionally, in an interview with Reuters, Johnson & Johnson executive said that the company could produce 1 billion doses of its vaccine candidate if it proves to be successful.
In spite of skepticism regarding Russia’s vaccine the news triggered optimism among investors and sent indexes higher for majority of the session. The S&P 500 hit a new all-time high and came within striking distance of its closing record high on February.
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