Stocks are in trading negative territory once again Monday, after trading significantly lower in the overnight session on Sunday amid news that Warren Buffett’s Berkshire Hathaway sold all airline holdings, as well as continued concerns about reopening the economy with the coronavirus pandemic still rampant.
The Dow Jones Industrial Average is trading down about 200 points, or 0.8%, while the S&P 500 has lost 0.3% as of 12;30pm EST. The Nasdaq Composite is barely holding onto a 0.54% gain, aided by big technology companies like Microsoft, Amazon, and Netflix which have climbed close to 1% Monday.
Stock index ETFs are also dropping amid the news, with the SPDR S&P 500 ETF Trust (SPY) falling 0.45%, while the SPDR Dow Jones Industrial Average ETF (DIA) giving up 0.81% and the Invesco QQQ Trust (QQQ) climbing above even with a 0.47%.
Berkshire sold its nearly 10% stake in American, United, Delta, and Southwest in April, Buffett announced at the company’s annual meeting on Saturday.
While Buffett was sanguine about future prospects for America, but the move demonstrates his concern that the pandemic has indelibly affected various industries, making it a challenge for recovery, and could be an indication that other investors are too optimistic about the economy returning to normal quickly.
“Mr. Buffett is a long-term investor, so his decision to sell reflects his belief that the airline industry is facing future challenges that fundamentally change the value-capture of that business,” wrote Tom Lee of Fundstrat in a note to clients.
A reopening of the country amid the still rampant coronavirus pandemic also has investors and analysts worried.
While seeking to assuage Americans’ fears that it’s safe for states to reopen, President Trump at the same time upwardly revised his prognostication for the number of coronavirus mortalities in the United States. “Look, we’re going to lose anywhere from 75,000, 80,000 to 100,000 people; that’s a horrible thing,” he said at a Fox News virtual town hall.
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