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S&P 500 slides from five-week high as virus fears weigh

Credit: REUTERS/BRENDAN MCDERMID

Wall Street's main indexes fell on Thursday with the S&P 500 slipping from a five-week high as concerns about the economic toll from rising coronavirus cases nationwide were amplified by data showing elevated levels of unemployment claims.

By Medha Singh and Devik Jain

July 16 (Reuters) - Wall Street's main indexes fell on Thursday with the S&P 500 slipping from a five-week high as concerns about the economic toll from rising coronavirus cases nationwide were amplified by data showing elevated levels of unemployment claims.

U.S. retail sales increased more than expected in June, but a resurgence in new COVID-19 cases is chipping at the budding recovery, keeping 32 million Americans on unemployment benefits.

The jump in domestic case loads has forced states such as California to shut down again, sparking fears of more business damage and slowing the pace of a Wall Street rally. The S&P 500 is about 5.8% away from its record high hit in February.

Rounding up earnings reports of big banks, Bank of America Corp BAC.N fell 1.7% after its second-quarter profit more than halved, while Morgan Stanley MS.N rose 3.5% after posting a record quarterly profit.

"There's going to be a little bit of a tug-and-pull based on the data and earnings, but I don't see a big move in the market in either direction in the next several weeks," said Carlton Neel, chief executive officer of investment research firm Chaikin Analytics in Philadelphia.

Many market experts also pointed out that the benchmark S&P 500 is struggling to rise above 3,230 points, its breakeven level for the year.

At 11:02 a.m. ET, the Dow Jones Industrial Average .DJIwas down 61.49 points, or 0.23%, at 26,808.61, the S&P 500 .SPXwas down 21.28 points, or 0.66%, at 3,205.28. The Nasdaq Composite .IXICwas down 169.82 points, or 1.61%, at 10,380.68.

The tech-heavy Nasdaq underperformed the S&P 500 for the fifth straight session, while S&P's cyclical sectors - financials .SPSY, industrials .SPLRCI and materials .SPLRCM - were in favor.

"This is an early indication of good signs that money is now flowing away from completely overbought Nasdaq into those names that will bode well when the economy starts finding more of a solid footing," said Andrew Smith, chief investment strategist, Delos Capital Advisors based in Dallas, Texas.

Twitter Inc TWTR.N fell 1.5% as hackers accessed its internal systems to hijack some of the platform's top voices including U.S. presidential candidate Joe Biden, reality TV star Kim Kardashian West, former U.S. President Barack Obama and billionaire Elon Musk and used them to solicit digital currency.

American Airlines AAL.O dropped 5.2% as it sent 25,000 notices of potential furloughs to frontline workers and warned that demand for air travel is slowing again.

Tesla Inc TSLA.O slipped 4.5% as its vehicle registrations nearly halved in the U.S. state of California during the second quarter, according to data from a marketing research firm.

Declining issues outnumbered advancers for a 1.18-to-1 ratio on the NYSE and for a 1.63-to-1 ratio on the Nasdaq.

The S&P index recorded 27 new 52-week highs and no new low, while the Nasdaq recorded 65 new highs and nine new lows.

(Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Maju Samuel)

((Devik.Jain@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2062; ;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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