Stocks sank into the close on Tuesday after trading mixed to lower throughout the session as fears about the coronavirus spreading even faster and easier tempered investor sentiment.
The Nasdaq Composite, which had rallied earlier in the session by as much as 0.8%, lost 0.8% in afternoon trading, while the Dow Jones Industrial Average plummeted 413 points, or 1.6% in a matter of minutes, as the S&P 500 shed 1.1%, sinking quickly into the close.
Stock index ETFs shed any gains as well, falling along with 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.
Both the Nasdaq and S&P 500 were attempting to notch six-day winning runs before Tuesday’s losses. The Dow also rallied in back-to-back sessions.
Some analysts seemed unsurprised by the drop.
“This market is way overbought,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “This market has been ignoring the potential problems that are going to arise from the coronavirus.”
Others see more protracted volatility, predicting that another national shutdown is unlikely.
“With the increasing virus cases, people are playing the stay-at-home stocks,” said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management. “One thing I will say is the probability of returning to a nationwide lockdown is incredibly slim. So I wouldn’t be surprised to see more of a rolling, back-and-forth market rather than one that goes straight up like we’ve seen the past few months.”
More than 2.93 million coronavirus cases have been confirmed in the U.S. with more than 130,000 deaths, according to Johns Hopkins University. Over the weekend, more than 20 states reported a hospitalization growth rate of at least 5%.
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