Stocks erased early gains and turned lower on Friday after a number of headlines raised concern about a resurgence in the coronavirus and a slowdown in the economy’s recovery.
The Dow Jones Industrial Average was down 150 points, or 0.5%, after gaining as much as 371 points earlier in the session. The S&P 500 traded 0.4% lower while the Nasdaq Composite dipped 0.2%.
- Apple said it’s reclosing a total of 11 stores in Florida, Arizona, South Carolina and North Carolina. All of the stores had been re-opened since Apple initially closed them in March amid the outbreak. Shares of the tech giant traded 1.5% lower on the news. Earlier in the day, they hit an all-time high.
- Shares of cruise line operators took a leg down after the Cruise Lines International Association announced suspension of cruise operations from U.S. ports, citing the ongoing situation with the pandemic. Norwegian Cruise Line and Royal Caribbean dropped more than 7% each, while Carnival fell 6%.
- Arizona and Florida reported record spikes in confirmed Covid-19 cases on Friday as states continue their phased reopenings and ramping up testing. Meanwhile, California on Thursday reported more than 4,000 new cases in a single day, the highest daily number ever.
“COVID cases have been spiking higher in certain US states …the issue is becoming too much for the market to ignore,” Vital Knowledge founder Adam Crisafulli said in a note Friday. “The problem has more to do with market expectations (way too complacent/calm) and psychology (with the consensus embracing the “V”-shaped narrative).”
Stocks benefiting from the economy reopening were also under pressure following Apple’s announcement. Gap, Kohl’s and Nordstrom all fell more than 3%. United Airlines slid 6.9% and Delta dropped 4.1%.
Trading was also volatile on Friday ahead of the S&P 500’s first rebalancing of 2020 which is usually associated with choppier trading as index and exchange-traded funds tracking the S&P 500 have to adjust for the benchmark’s changes. It also coincided with the so-called quadruple witching, when options and futures on indexes and stocks expire.
Stocks started the day with strong gains after a report by Bloomberg News said that China was set to up its purchases of U.S. farm products to comply with the phase-one trade deal. The report eased concerns about U.S.-China trade relations as the two countries exchange heated rhetoric regarding the coronavirus.
Still for the week, the major averages were on pace to post their fourth weekly gains in five. The Dow and S&P 500 were each up at least 1% week to date while the Nasdaq has risen 3.5%. Those gains came after a record surge in U.S. retail sales and the Federal Reserve announcing it will buy individual corporate bonds.
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