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Nasdaq Ends at Record as S&P 500, Dow Ease After Recent Gains

Nasdaq Ends at Record as S&P 500, Dow Ease After Recent Gains
(AP)

Tuesday, 09 June 2020 04:09 PM

The S&P 500 and Dow fell on Tuesday, pausing after recent strong gains as focus shifted to the Federal Reserve, while the Nasdaq ended at an all-time high for a second straight day after briefly rising above the 10,000 mark for the first time.

The Fed began a two-day meeting. While no major policy announcements are expected when the U.S. central bank wraps up on Wednesday, investors will scrutinize its remarks on the health of the economy, which has been reopening after coronavirus-related closures.

The Nasdaq's gains came on the back of strong gains in tech-related shares, a day after the index became the first of Wall Street's major indexes to confirm a new bull market. Apple , up 3.2%, gave the Nasdaq its biggest boost on Tuesday.

The benchmark S&P 500 fell back into negative territory for the year after temporarily erasing those losses on Monday.

"It strikes me as maybe a reflexive selloff as a result of a tremendous rally over the past week. There's no news headline that screams bearish catalyst to me. But conversely, other than the nonfarm payrolls data, the past two weeks haven't had super bullish catalysts either," said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York.

"In the grand scheme of things, it seems like the market has caught a bullish fever, and it's feeding on itself."

The rally in U.S. stocks accelerated last week after strikingly upbeat May jobs data strengthened views that the worst of the economic fallout from the pandemic was over.

Financial and industrial shares, which have been among stocks that have surged in recent weeks on hopes of an improved economic outlook, were the biggest drags on the benchmark S&P 500 on Tuesday.

The Dow Jones Industrial Average fell 300.14 points, or 1.09%, to 27,272.3, the S&P 500 lost 25.21 points, or 0.78%, to 3,207.18 and the Nasdaq Composite added 29.01 points, or 0.29%, to 9,953.75.

U.S. financial market operators, including the New York Stock Exchange, held a moment of silence in honor of George Floyd, a 46-year-old African American who died on May 25 after a white police officer knelt on his neck for nearly nine minutes.

The S&P 1500 airlines index tumbled 7.5%, while cruise operators Carnival Corp and Norwegian Cruise Line Holdings Ltd fell following their recent sharp recovery amid recent signs of a pickup in global travel.

Declining issues outnumbered advancing ones on the NYSE by a 3.09-to-1 ratio; on Nasdaq, a 1.84-to-1 ratio favored decliners.

The S&P 500 posted 10 new 52-week highs and no new lows; the Nasdaq Composite recorded 56 new highs and one new low.

Volume on U.S. exchanges was 13.82 billion shares, compared to the 12.54 billion average for the full session over the last 20 trading days.

GLOBAL MARKETS

 A recent run of optimism in markets hit the brakes on Tuesday as investors mostly pulled back from stocks, though the Nasdaq extended its record run to a new high, while the safe-haven yen, Swiss franc and gold rallied.

A slide in Europe and partially on Wall Street capped a rally that has pushed Asian stocks outside of Japan overnight higher for a ninth straight day.

Oil prices closed higher as concerns about a resurgence in coronavirus cases were offset by recent commitments from the major oil producers to rein in production.

The tech-heavy Nasdaq Composite shook off early losses to close up 0.33% and briefly cleared 10,000 points for the first time.

MSCI's gauge of stocks across the globe fell 0.46%, about 6% below its all-time peak in February.

The selloff in equities was the result of a tremendous rally over the past week, said Mike Zigmont, head of trading at Harvest Volatility Management in New York.

"There's no news headline that screams bearish catalyst to me," he said. "But conversely, other than the nonfarm payrolls data, the past two weeks haven't had super bullish catalysts either."

Attention now turns again to the U.S. Federal Reserve, which kicked off a two-day meeting on Tuesday. No major policy announcements are expected when it wraps on Wednesday, but the U.S. central bank will issue its first economic projections since December. Investors will be watching as the Fed attempts to gauge the economic cost of widespread pandemic-related lockdowns, as well as any hints of future stimulus.

The safe-haven yen and Swiss franc both gained against the dollar for a second straight day this week.

The yen rose to one-week highs against the dollar, while the Swiss franc climbed to its highest in more than two months versus the greenback.

LOOMING IMPACT

After a brutal March for global equity markets amid concern over both the short- and longer-term damage to the world economy from the coronavirus pandemic, most indices are near pre-COVID-19 levels.

But fears of renewed trade tensions between the United States and China and the broader economic impact from the pandemic, such as higher unemployment and looming bankruptcies, are hanging over the outlook.

The number of layoffs in the U.S. dropped in April, but were still high enough to be the second most on record. At the same time, hiring hit an all-time low, the Labor Department reported Tuesday.

In its latest Global Economic Prospects report on Monday, the World Bank said advanced economies are expected to shrink 7.0% in 2020, while emerging-market economies will contract 2.5%, their first slump since aggregate data became available in 1960.

Gold jumped 1.2% on Tuesday as investors adopted a more cautious stance ahead of the Fed's policy meeting. U.S. gold futures settled up 1% to $1,721.90 an ounce.

Latin American stocks and currencies were down Tuesday as investors cashed in after a recent rally. Regional currencies weakened ahead of the Fed meeting.

The declines weighed on the broader emerging markets shares benchmark, which was up 0.2%. The broader Latin American shares benchmark was down 0.85%.

Oil prices slipped nearly 1% after Brent had hit its highest in more than three months at $41 a barrel.

Brent oil futures rose 38 cents to settle at $41.18 a barrel, while U.S. crude settled up 75 cents at $38.94.

© 2020 Thomson/Reuters. All rights reserved.


   
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The S&P 500 and Dow fell on Tuesday, pausing after recent strong gains as focus shifted to the Federal Reserve, while the Nasdaq ended at an all-time high for a second straight day after briefly rising above the 10,000 mark for the first time.
nasdaq, record, s&p 500, dow, wall street
1019
2020-09-09
Tuesday, 09 June 2020 04:09 PM
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