Stocks and index ETFs are struggling on Wednesday in mixed, volatile trading, after a selloff Tuesday that broke a multi-day winning streak in both the Nasdaq and S&P 500.
The stock market’s sectors are mixed, with gains in key technology names offsetting declines in stocks that stand to improve from the reopening of the economy, which is currently threatened by an elevation in the number of coronavirus cases.
The Dow Jones Industrial Average traded 57 points higher, or 0.2% before selling off to 0.13% lower. Earlier in the day, the Dow was up more than 200 points. The S&P 500 climbed 0.4% but is falling swiftly toward breakeven, and the Nasdaq Composite climbed nearly 1% before relinquishing substantial ground to trade also near breakeven as of 130PM EST.
Stock index ETFs are trading mixed as well, tracking the underlying benchmarks. The SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), Invesco QQQ Trust (QQQ) all sank into the close after a mixed performance earlier Tuesday, and the SPY is struggling to stay afloat Wednesday, while the QQQ is outperforming.
“It seems like you flip a switch when those Covid cases go up, the country takes a step back in terms of reopening the economy and all those names find high demand,” said Christian Fromhertz, CEO of The Tribeca Trade Group, referring to tech and software shares. If that changes, he added, “people will start to look at the more under-owned names once again.”
Travel and leisure stocks that would be rewarded from the economy reopening were under pressure, with Delta and American Airlines slipping 2% and 1.8%, respectively, while United Airlines slumped 3% after the company admonished a plethora of employees about looming job cuts. The U.S. Global Jets ETF (JETS) is down almost 2% amid the news.
Coronavirus-related deaths have climbed to more than 131,000 in the U.S., according to Hopkins.
“The COVID numbers in the US remain troubling and this is beginning to create economic headwinds,” said Adam Crisafulli, founder of Vital Knowledge, in a note.
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