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S&P Slashes Gains to End Lower as California Shutdown Triggers Tech U-Turn

Published 07/13/2020, 03:39 PM
Updated 07/13/2020, 04:10 PM
© Reuters.

By Yasin Ebrahim

Investing.com – Wall Street ended lower after giving up gains on Monday as a sea of red swept through tech after California moved to shut down all indoor activities.  

The S&P 500 fell 0.94%, while the Nasdaq Composite fell 2.13% and the Dow Jones Industrial Average was flat.

California Gov. Gavin Newsom said that all counties in the state must close indoor restaurants, movie theaters and wineries following a surge in coronavirus cases.  “We are moving back into a ‘modification mode’ of our original stay-at-home order,” said Newsom. “This is a new statewide action, effective today.”

In another blow to investor optimism over the economic recovery, the Los Angeles School District, the second-largest in the U.S., meanwhile, announced that it would begin the school year exclusively online on Aug. 18. The move comes as the recent surge in the spread of the virus across hotspots including California, Florida, Arizona, and Texas, took the total infections to 3.4 million with about 136,000 deaths nationwide.

 
Tech cut gains to end the day in the red after FAANG stocks came under heavy pressure after hitting new highs. Apple (NASDAQ:AAPL), which had led the broader move higher erased more than 3% of gains.

The renewed jitters over further lockdown measures offset positive vaccine news.  

Pharma giant Pfizer said that two of the four new coronavirus vaccine candidates that it was developing with German-based BioNTech (BNTX) received fast-track designation from the U.S. Food and Drug Administration.

Pfizer (NYSE:PFE) jumped 4%, while Biontech (NASDAQ:BNTX) jumped 10.7%.

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The corporate earnings season, which got underway on Monday, also provided investors with clues on the pandemic's impact on corporate results.

PepsiCo (NASDAQ:PEP) reported second-quarter results that beat consensus estimates on both the top and bottom lines, led by performance in its global snacks and foods business. Its shares ended flat.

A slew of earnings from banks including Wells Fargo (NYSE:WFC), JPMorgan Chase (NYSE:JPM), and Citigroup (NYSE:C)  - all of which are set to report quarterly results on Tuesday – will offer further insight into activity on Wall Street with an uptick trading income and higher loan loss provisions expected to garner investor attention. 

Casino stocks, meanwhile, caught a bid as on news Macau lifted quarantine requirements.

Wynn Resorts (NASDAQ:WYNN) rose 6%, Las Vegas Sands (NYSE:LVS) was up 6.2%, and MGM Resorts (NYSE:MGM) rose 1.2%.

Latest comments

For huge daily profits. WA: +1 (712) 796 0331
One more thing.. Those who kept buying have no readon to complain when everything starts reversing.. Reap what you sow.
wear masks, stay at home! protect your parents and the elderly!! don't play with public health 🙏🙏
And they release news prior to market closing. Why is that causing the market to reverse? Whoever brought the news must be insane borderline manipulative
The news from CA came at lunchtime in their timezone, not prior to the market closing.
 lunch time CA is almost 3pm/4pm New York, there you go where stock market are based.
The hedge funds propped it up in the early day knowing full well they would sell off at the end. It is going back up this week
I almost feel bad for the people who bought nearly 50,000 NFLX July 17 2500 call options today. The VIX began to rise as the market was rising in the morning, and bond yields were falling. Both were tipoffs that something wasn’t right today.
How many billions will Newsom request of the Federal government for the damage he's caused? Here's hoping the answer is NO.
Should’ve taken this measure long ago. China lockdown the whole country for a month to prevent virus spread. They have 1.4 billion people. I believe it should not be that hard for us.
Shutdown America and save lives. Only republicans wants to sacrifice grandmas and kids for the stock market
!2× xxv a2w
oops
Thanks a lot Chairman Newsome!! Much ado about nothing.
Fauci said Monday that the outbreak in the U.S. hasn’t “even begun to see the end” of the coronavirus pandemic yet as scientists continue to work on potential drugs and vaccines for the virus. He said he’s “cautiously optimistic” scientists will be able to create at least one safe and effective vaccine by the end of the year or early 2021. Fauci also said he expects the public to compare the Covid-19 pandemic to the 1918 pandemic flu, which killed around 50 million people, according to the Centers for Disease Control and Prevention.  https://www.cnbc.com/2020/07/13/fauci-says-us-coronavirus-cases-are-surging-because-nation-didnt-shut-down.html.
Fauci wants to sell the vaccine. Thats all you need to know.
Totally disgusting. Elderly will be lab rats.
Markets tanking and will continue to tank with the thought of Sleepy Dementia Joe as President and the Dems/Left/Anarchists in charge.
That’s funny, because the market went up during the last two democratic presidencies, only to crash during the republican ones. That’s a fact.
Presidents don't affect the stock market. The markets will go up and down no matter what.
You don’t believe that Trump’s huge corporate tax rate cut had a positive effect on stocks?
democrats complain about billionaires and pharmaceutical companies gouging the little person, then due to their hatred of trump hype up COVID-1984 to try and tank the economy and end up just making billionaires and pharmaceuticals richer preying on peoples fear
Not a big Trump fan, but at least he was willing to try to straighten out pharm. Big shock, the dems shot it down
Ummm, how does staying indoors affect tech, except further support it??? The Nasdaq selloff today made no sense whatsoever
If your shop is not open why would you then want to spend money on advertising on Facebook, Google, twitter etc.
made no sense, but it had solid backup from the fed
that's comm. svcs you referenced, not tech
the government has flip flopped so many times, how anybody believes anything any of these moro.ns have to say is beyond me. politics has become so toxic that only toxic people like to get into it. it is like police reform, by politicians demonizing people for enforcing the terrible policies that they come up with, all they do is make toxic people want to be police officers. leftist in this country just want to see it burn because they are empty people with pointless lives that they do not even know what gender they are, they do not like having a family, they just want to sit around all day complaining about microaggressions while having no concept of reality. and now a major political party the DNC has embraced them because they are so desperate for votes. independents like myself have no choice but to join trump on the republican side because they are the only realistic alternative to these lunati.cs
eddie nails it again!
you can thank the liberal Dums for that, and for most of the problems of modern society...a slippery slope downhill when those hippie kids and beatniks thought they knew better smh
This calls for more stimulus to support the market, at least before the election. Be happy!
You mean bribery? I just want to go back to work and live my own life again.
today thats funny
I am an American currently living overseas. from the outside looking in the messaging from the white house has been horrendous. you need a consistent message for gods sake! and the message is: wear a mask, social distance, wash or disinfect your hands. simple rules!!! follow them!! you don't have to shut everything down. stop complaining and batching about your freedom. this won't last for ever. get tough!!
I thought you can only get tough by not wearing a mask. Caring for infectious diseases is weakling.
Exactly, Leonard Kong... the solution is so simple. Why can't people follow it?
I'm an American and I couldn't agree more, Leonard. Unfortunately the political situation has become so bad over here that almost everything, including precautions as simple as wearing a mask in public, has become a conservative vs. liberal issue. President Trump's legacy will be the extreme divisiveness and mistrust that he has incited in Americans.I am still hopeful that we will get our act together as a country and get the outbreak under control. Also staying optimistic for good news from the ongoing clinical studies for COVID treatments.
Tomorrow: US Stocks Down After Asia Stocks Fall After US Stocks FallWed: US Stocks Soar on Quick Recovery Hopes
U-turn for a day? That's the big question
Maybe, but I wouldn’t expect the market to climb much before people who lost a lot in tech today grab some of their money back. Tough slog up from here.
Starving to death in a house that's been repossessed doesn't work for me. I'll take my chances with the virus.
I'm not interested in the political side.  But we do gain herd immunity from the flu, from specific strains of flu, but there will always be a new one. And coronavirus isn't new, it's just this particular strain is more virulent. Nobody is suggesting we'll get herd immunity from as yet not existing new strains - but most strains aren't so deadly.  It's COVID-19 that people are worried about. Yes, we would eventually get herd immunity, if someone tells you otherwise they are misinformed.  But, we generally don't want to get it, by letting it run wild, because too many people would die.  Better to get virus and/or effective treatments available.
No permanent immunity with COVID-19.
herd immunity is different. He was talking about genetical immunity.
They tried the herd immunity theory in Sweden by not locking down. It didn’t work.
decide yourself. The shut down is helping them or trigger them. Cannot use both to justify
was wondering when democrats were going to try and tank the market again... they gave up on looting and rioting doing the trick... back to COVID-1984 fearmongering! gotta be scared of that virus that we have now found out is less deadly than the common flu as long as democeats in NY like cuomo are not shoving people into crowded nursing homes, which resulted in nearly 1/3 of ALL reported covid deaths in the US.
Chances are, the produce in your refrigerator comes from California. They feed the United States. I am talking about the central valley. California needs to get back to work ASAP!
More cases = more fearless people = more will buy into a bubble = higher stock. QED.
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