After a solid run higher in the first half of Monday trading, stocks staged a dramatic turnaround, giving back all gains and closing lower on the day amid fresh concerns that the coronavirus resurgence will ravage the economy once again.

Stocks rallied early on Monday, briefly driving the S&P 500 into positive territory for the year, on seemingly no new data, in a surge that was driven by technology stocks, despite still spiking coronavirus cases.

The S&P 500 had gained 2% and was up about 0.1% for the year earlier, before it all came crashing down in the second half of the session, as California released a statement about shuttering movie theaters and outdoor dining, sending shockwaves through Wall Street, who fear a repeat of March.

Stock index ETFs which had rallied on the day, largely closed lower, with the SPDR Dow Jones Industrial Average ETF (DIA) essentially breakeven, while the  SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) posted losses. The Nasdaq Composite lost more than 2% after a considerable gain earlier, fueled in part by wild trading in Tesla.

California Governor Newsom said the state confirmed 8,358 new cases on Sunday. The state’s positivity rate, or the percent of all tests returning positive, has ticked up to 7.4%.

“The data suggests not everyone is acting with common sense,” Newsom said at a press conference Monday.

Monday had marked the first time since early June that the S&P 500 traded positive year to date, climbing more than 47% from an intraday low set March 23 and trading just 5.2% below a record set in late February.

“The S&P rising back to positive territory for 2020 and aiming at all-time record highs may just be confirming that the economy has entered a new expansion,” said Jim Paulsen, chief investment strategist at The Leuthold Group, in an email. Paulsen added that, while this surge may seem “bizarre” to some, the market has massive amounts of stimulus helping it recover.

“When in the history of the U.S. has such a dramatic and massive economic policy assault (i.e., a $7 trillion Fed balance sheet, 20%+ money supply growth, zero yields, and 20%+ net fiscal stimulus as a percent of nominal GDP) been unsuccessful in boosting both the stock market and the economy?” he said.

But that massive rejection that occurred near the June highs in the S&P 500 today could also spell disaster for markets and the economy.

Despite investor complacency regarding the virus, the U.S. has reported over 60,000 new cases daily for the last three days in a row now, driving the national tally to over 3 million cases, according to data from Johns Hopkins University.

“COVID remains a huge problem w/cases, hospitalizations, and fatalities all climbing,” Vital Knowledge founder Adam Crisafulli said in a note on Sunday. “The market continues to absorb all this information relatively well and this seems to be a function of vaccine hopes, lower fatality rates vs. Mar/April, the avoidance of wholesale lockdowns, and the lack of a resurgence in the Northeast (esp. NYC).”

For California, the situation seems direr.

“The data suggests not everyone is acting with common sense,” Newsom said at a press conference Monday.

Earlier on Monday the Los Angeles Unified and San Diego Unified, two of the more significant districts, issued a joint statement claiming that they will begin the fall school year online, citing that much of the research surrounding the coronavirus and children is still unknown and many of the guidelines for reopening are “vague and contradictory.”

“One fact is clear: those countries that have managed to safely reopen schools have done so with declining infection rates and on-demand testing available. California has neither,” according to the statement.

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