Stock indexes are continuing their mixed trade for the second day Tuesday, as concerns the coronavirus may continuing to fester for the foreseeable future is giving investors pause as the U.S. economy heads toward a gradually reopening.
The indexes are mixed again on Tuesday, which is keeping stocks within Monday’s range. After a selloff into early overnight session trading, stocks have bounced back some, and are trading roughly unchanged. The Dow Jones Industrial Average lost 28 points, or 0.18% as of 1 pm EST, but has given back some gains from an earlier trade. Meanwhile, the S&P 500 gave up 0.21% and was also higher earlier, but it heading lower, while the Nasdaq Composite continues to lead the other indices, up 0.24%.
Stock Index ETFs are echoing moves in the benchmark stock indexes as well. The SPDR S&P 500 ETF Trust (SPY), and the SPDR Dow Jones Industrial Average ETF (DIA) are both lower today, while the Invesco QQQ Trust (QQQ) has recovered from its earlier losses on the day to trade in the green.
White House health advisor Dr. Anthony Fauci told Congress on Tuesday that he’s concerned that some states are too focused on reopening businesses without regard for the consequences, and may have ” little spikes” in coronavirus cases that could exacerbate into massive outbreaks if they are not contained.
Fauci’s comments are amid a continuing coronavirus contagion, which has now infected over 1.3 million people and killed at least 80,684 as of Tuesday morning, according to data compiled by Johns Hopkins University. U.S. health officials say the real tally of infections and deaths is likely much greater as people infected with the virus often go undetected.
“What I’ve expressed then and again is my concern that if some areas, cities, states, what have you, jump over those various checkpoints and prematurely open up without having the capability of being able to respond effectively and efficiently my concern is that we will start to see little spikes that might turn into outbreaks,” Faucitestified at a hearing before the Senate Committee on Health, Education, Labor, and Pensions.
While analysts are also optimistic about reopening the country, there is a focus on technically overbought levels in the markets, adding a sprinkle of caution to that positive outlook.
“The world very much remains on the path to reopening, a process that will accelerate over the coming weeks,” said Adam Crisafulli, founder of Vital Knowledge, in a note. He added, however, the S&P 500 is still overbought at current levels even as expectations of a gradual resumption of economic activity continue to increase.
“There will be a reckoning around the reopening and linearity narratives (i.e. both are too sanguine right now),” Crisafulli wrote.
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