Dow Jones Treads Water As Virus Cases Rise; Techs Shine

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The S&P 500 and Dow Jones indexes were largely unchanged on Monday as investors assessed stimulus-fueled recovery hopes against an increase in coronavirus infections that could derail a rebound in business activity.

SEE ALSO: India To Convert Railway Coaches To Isolation Centers As Hospitals Run Out Of Beds

Demand for perceived safe-havens, including gold and U.S. Treasuries, rose as the World Health Organisation reported a record rise in global coronavirus cases on Sunday.

Shares of airlines, one of the worst-hit sectors by the lockdowns to contain the spread of the virus, tumbled, with the S&P 1500 airlines index down 1.2per cent.

American Airlines Group Inc fell 6 per cent as it planned to secure $3.5 billion in new financing by selling shares and convertible senior notes to boost liquidity.

“Investors are trying to calibrate the difference between an increase in new coronavirus cases against sequentially improving economic data…,” said Art Hogan, strategist at National Securities.

“The concern right now is the possibility of partial reclosing of the economy as and when fresh cases flare up.”

In the past week, several U.S. states, mainly in the West and South, have reported a surge in cases, with Apple Inc’s move to temporarily shut some U.S. stores again on Friday underscoring concerns of a delay in the recovery.

The rising cases have weighed on investment sentiment recently. The S&P 500 is stuck in a trading range after trillions of dollars in monetary and fiscal support, the reopening of businesses and improving economic data lifted the index about 40 per cent from its March lows.

It is now just about 9 per cent off its Feb. 19 record high.

Technology stocks, which have powered much of the rebound, again provided the biggest to the benchmark index. Four of the 11 major S&P sectors were higher.

At 10:06 a.m. ET, the Dow Jones Industrial Average was up 21.37 points, or 0.08 per cent, at 25,892.83, the S&P 500 was up 2.89 points, or 0.09 per cent, at 3,100.63. The Nasdaq Composite was up 27.50 points, or 0.28 per cent, at 9,973.62.

U.S.-based meat processor Tyson Inc slipped 2.7 per cent as China’s customs authority suspended imports of poultry products from a plant owned by the company that had been hit by the coronavirus.

Virgin Galactic Holdings Inc soared 14.2 per cent as it signed up with NASA to develop a programme to promote private missions to the International Space Station.

Declining issues outnumbered advancers for a 1.39-to-1 ratio on the NYSE and for a 1.45-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and no new low, while the Nasdaq recorded 69 new highs and four new lows.

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