Home > Business > Nasdaq trades in record territory as technology-related shares rise, S&P 500 flips positive

Nasdaq trades in record territory as technology-related shares rise, S&P 500 flips positive


U.S. stocks on Tuesday were attempting to recover some early lost ground, led by gains in technology and tech-related shares, as investors assessed the economic and public-health environment following a strong rally to start the week.

The apparent pause in unfettered enthusiasm for equities followed revised forecasts from the European Commission and the Paris-based OECD, which expect to see the highest unemployment rates since the Great Depression of the 1930s amid the COVID-19 pandemic.

How are benchmarks performing?

The Dow Jones Industrial Average

was down 138 points, or 0.6%, to around 26,140, the S&P 500 index

was up 3 points, or 0.1%, at 3,183; while the Nasdaq Composite Index

erased opening losses to carve out an intraday record at 10,512, and was up 78 points, a gain of 0.8%, at last check.

On Monday, the Dow gained 459.67 points, or 1.8%, to end at 26,287.03. The S&P 500 climbed 49.71 points, or 1.6%, ending at 3,179.72 and matching its longest win streak, five straight sessions since the period ended Dec. 17; while the Nasdaq surged 226.02 points, or 2.2%, to 10,433.65, scoring its third straight record and its 24th of the 2020.

What’s driving the market?

Nagging unease over the outlook for the global economy in the midst of rising U.S. coronavirus infections helped to slightly dampen the buying mood on Wall Street, but technology shares, which had led losses earlier in the session, were staging an intraday rebound.

Investors drew some hope from a report on employment that showed a record 6.5 million people either found jobs or were rehired in May, as the economy tries to emerge from a prolonged shutdown due to the coronavirus that drove the U.S. into a deep recession.

Job openings also rose to 5.4 million in April from 5 million in the prior month, according to a Labor Department report that’s released with a one-month delay. The number of jobs available was running around 7 million before the pandemic.

However, parts of the economy are facing roll backs of business openings as a rise in COVID-19 threatens to run out of control and delay a hoped-for economic recovery.

Atlanta Fed President Raphael Bostic described the nascent U.S. recovery from the viral outbreak as “leveling off,” raising doubts about a V-shaped, or swift and powerful, economic rebound.

As coronavirus cases and hospitalizations rise, some American states are mandating masks and reimposing shutdown orders, with the number of new coronavirus infections during the first six days of July nearing 300,000. The number of people hospitalized with COVID-19 grew by 5% or more Sunday in 23 states, including Texas, which reported a record of more than 8,000 hospitalizations. The U.S. is “still knee deep in the first wave” of the pandemic, Anthony S. Fauci, the director of the National Institute of Allergy and Infectious Diseases, said Monday.

“Second wave anxiety is putting a downer on the economic enthusiasm that accompanied the lifting of restrictions around the world and its left investors caught in two minds about the great stock market recovery,” wrote Craig Erlam, senior market analyst at Oanda, in a daily research note.

Market participants also attributed some of the day’s malaise to dimming outlook for quarterly earnings, even though they are widely expected to be poor, given the challenges posed by the pandemic.

“We are heading into second quarter earnings season though which will naturally be a disaster, albeit one that will more than likely get a free pass, as investors focus more on the reopening prospects,” Erlam said.

Meanwhile, the Organization for Economic and Cooperation and Development said on Tuesday that unemployment will reach the highest level since the Great Depression and may not return to pre-crisis levels until 2022.

That report comes as the European Commission lowered its eurozone economic forecast by a percentage point, predicting a contraction of 8.7% this year. That news also comes as German industrial production rebounded a slower-than-forecast 7.5% in May, according to data released Tuesday, adding to the sober economic updates were comments from

Check out:The stock market is poised for a 40% drop, warns economist who says the current climate feels a lot like 1929

Which stocks are in focus?
  • Shake Shack Inc.

    stock fell 4.6% after the burger chain announced preliminary second-quarter sales that missed expectations. Shake Shack said sales totaled $91.8 million for the quarter ending June 24, below the FactSet consensus for $101.0 million.

  • Novavax’s

    experimental COVID-19 vaccine is in an early phase trial involving 130 participants funded by $388 million from the Coalition for Epidemic Preparedness Innovations, a nongovernmental organization funded by governments and foundations. Its stock climbed more than 28%.

  • Shares of Corvus Pharmaceuticals Inc.

    soared 136% on Tuesday after the company said it launched an open-label Phase 1 clinical trial testing an experimental monoclonal antibody as a treatment for COVID-19.

  • Paychex Inc.

    said Tuesday it had net income of $220.7 million, or 61 cents a share, in its fiscal fourth quarter to May 31, down from $230.4 million, or 64 cents a share, in the year-earlier period. Shares fell 2.2%.

  • Tripadvisor inc.

    said Tuesday it plans to offer $500 million of new senior notes that mature in 2025. Shares of the company were off 3.2%.

  • Shares of Regeneron Pharmaceuticals Inc.

    gained 3.5% on Tuesday after the drugmaker said it received $450 million from the federal government to manufacture and supply its still investigational COVID-19 treatment.

  • Residential solar-panel installer Sunrun Inc.

    announced a deal Monday night to acquire rival Vivint Solar Inc.

    for about $3.2 billion, including debt. Shares of Sunrun were up 22%, while those for Vivint were rising around 35%.

How are other assets performing?

West Texas Intermediate U.S. crude

for August delivery rose by a penny, or less than 0.1%, to $40.64 a barrel, on the New York Mercantile Exchange, after slipping less than 0.1% on Monday. In precious metals, August gold futures

jumped $13.60, or 0.8%, to $1,807.20 an ounce, pushing it to its highest level since around 2011.

The 10-year Treasury note yield

was 1.1 basis points lower at 0.673%. Bond prices move inversely to yields.

The greenback rose 0.1% against a basket of its major rivals, based on trading in the ICE U.S. Dollar Index.

In European equities, the Stoxx Europe 600 index

traded 0.9%, and London’s FTSE 100

declined 1.5%. In Asia markets, the Shanghai Composite Index

closed up 0.4%, the CSI 300 Index

finished 0.6% higher after yesterday’s 5.7% rally. Hong Kong’s Hang Seng Index

fell 1.4% and South Korea’s Kospi Composite Index

fell 1.1%.

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