Stocks showed a notable move to the downside in early trading on Monday but regained ground as the day progressed. The major averages climbed well off their worst levels of the day, with the tech-heavy Nasdaq reaching positive territory.
While the Nasdaq climbed 38.85 points or 0.5 percent to 8,192.42, the Dow slumped 328.60 points or 1.4 percent to 23,390.77 and the S&P 500 slid 28.19 points or 1 percent to 2,761.63.
The early weakness on Wall Street was partly due to profit taking, as some traders cashed in on last week’s rally, which lifted the major averages to their best levels in nearly a month.
Lingering concerns about the economic impact of the coronavirus pandemic also weighed on the markets, with the number of daily deaths from the disease in the U.S. reaching a record high of more than 2,000 on Friday.
However, White House health advisor Dr. Anthony Fauci expressed “cautious optimism” the outbreak is slowing down in an interview with CNN on Sunday.
Fauci noted that hospitalizations and intensive care admissions in the New York metropolitan area have not only flattened but stated to turn the corner.
“So, that’s where we’re hopeful. And it’s cautious optimism that we’re seeing that decrease,” Fauci said. “And if you look at the patterns of the curves in other countries, once you turn that corner, hopefully, we will see a very sharp decline.”
At the same time, Fauci cautioned that reopening the country will not be like flipping a light switch and will depend on the situation in different parts of the country.
New York Governor Andrew Cuomo also recently suggested that “the worst is over” if people “continue to be smart going forward.”
“We’re controlling the spread,” Cuomo said at a press conference on Monday. “The worst can be over, and is over, unless we do something reckless.”
Despite the mixed close by the broader markets, housing stocks saw substantial weakness on the day following the rally seen last week.
Reflecting the weakness in the sector, the Philadelphia Housing Sector Index plunged by 5.5 percent after skyrocketing by nearly 30 percent last week.
Profit taking also contributed to significant weakness among banking stocks, as reflected by the 3.9 percent nosedive by the KBW Bank Index.
Commercial real estate, utilities, and chemical stocks also saw considerable weakness after turning in some of the market’s best performances last week.
On the other hand, gold stocks moved sharply higher over the course of the session, driving the NYSE Arca Gold Bugs Index up by 7.1 percent.
The rally by gold stocks came as the price of the precious metal turned higher after moving to the downside earlier in the session, with gold for June delivery climbing $8.60 to $1,760.90 an ounce.
Retail stocks also showed notable move to the upside as the day progressed, with the Dow Jones U.S. Retail Index jumping by 2.7 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday, although several major markets were closed for holidays. Japan’s Nikkei 225 Index tumbled by 2.3 percent, while China’s Shanghai Composite Index fell by 0.5 percent.
Meanwhile, the European markets remained closed today for Easter Monday.
In the bond market, treasuries showed a lack of direction before closing modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points to 0.749 percent.
News on the coronavirus front is likely to continue to attract attention on Tuesday, overshadowing a report on import and export prices in the month of March.
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