S&P 500, Nasdaq fight to hold near records as rise in coronavirus cases injects doubt in bullish sentiment

Stock indexes traded under pressure Thursday afternoon, with the S&P 500 and the Nasdaq struggling to maintain altitude in record territory and the Dow tilting lower after a change in the methodology reported by China resulted in a sharp rise in COVID-19 cases and deaths.

What are major indexes doing?

The Dow Jones Industrial Average DJIA, -0.19%  was 63 points, or 0.2%, lower at 29,488, while the S&P 500 index SPX, +0.04% gained less than 0.1% to trade at 3,381, after establishing an intraday record at 3,385.09. The Nasdaq Composite Index COMP, +0.06% advanced 6 points, or 0.1%, to 9,731, after hitting its own intraday record in afternoon dealings at 9,748.32.

All three major benchmarks posted record finishes on Wednesday, with the trio trading off opening losses on Thursday.

What’s driving the market?

China on Thursday reported 254 new deaths from the virus over the past 24 hours, while the number of new cases jumped 15,152, after the government applied a new diagnostic method was applied in hard-hit Hubei province. The World Health Organization said Thursday that the total deaths from the outbreak stood at 1,369, while the total number of confirmed cases rose to 60,329.

Seema Shah, chief strategist at Principal Global Investors, said that the market may have exhibited a knee-jerk response to fresh reports on the outbreak. “The surge in reported cases reported today is a one-off change due to methodology and by itself, doesn’t imply an acceleration in the pace of infection,” she said in emailed comments.

“However, if the change in methodology does result in a rise in the growth rate of reported cases, market sentiment will inevitably deteriorate, reversing the more upbeat tone of recent days as markets had become increasingly reassured that the virus will soon plateau,” she said.

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