U.S. stocks finished lower Tuesday, far from session highs, thwarting a second session of gains despite signs that the COVID-19 pandemic may be leveling off in parts of the world.
Markets also kept an eye on further planned U.S. measures to help dampen the recessionary impact of shutdowns and business closures intended to limit the epidemic.
How did indexes perform?
The Dow Jones Industrial Average (DOW:DJIA) lost 26.13 points, or 0.1%, to finish at 22,653.86, the S&P 500 index (S&P:SPX) shed 4.27 points, or 0.2%, to end at 2,659.41, and the Nasdaq Composite Index (AMERICAN:COMP) fell 25.98 points, or 0.3%, closing at 7,887.26.
At session highs early Tuesday, the Dow had gained 937.25 points, or 4.1%, the S&P 500 rose 93.21 points, or 3.5%, and the Nasdaq gained 233.20 points, or 2.9%.
The U-turn marked the largest blown gain over a session since October 2008 for both the Dow and S&P 500, according to Dow Jones Market Data.
What drove the market?
Eagerness to buy beaten-down stocks on Wall Street faded in afternoon trade, even as investors focused on signs of a slowdown in new daily deaths and infections from COVID-19, the deadly disease that was first identified in Wuhan, China in December.
“Stocks are giving the impression that the market may have moved too far too quickly,” Robert Pavlik, chief investment strategist at SlateStone Wealth, told MarketWatch. “With yesterday’s major point gain and lack of a follow through today, there is a thinking that some money is being taken off the table.”
Meanwhile, Italy reported the lowest number of new coronavirus infections in nearly three weeks, after China reported no new deaths, though deaths in Spain rose after declining for four consecutive days.
Reports also suggested that U.S. lawmakers are hashing out a so-called Phase 4 relief package for next month that could be worth more than $1 trillion, to help prop up the economy and assist workers and small companies, according to Bloomberg .
Treasury Secretary Steven Mnuchin said Tuesday he wanted another $250 billion from Congress to help shore up small businesses. Republican Sen. Marco Rubio of Florida said a bipartisan effort to further aid could be put to a vote Thursday, potentially expanding aid to employers and their workers during the shutdown.
These factors have offered some guarded optimism to bullish investors still wrestling with fallout from the pandemic, which has pushed domestic and international economies into recession.
“We are seeing progress, but the virus is not under control yet,” Adam Phillips, director of portfolio strategy at EP Wealth Advisors in Los Angeles told MarketWatch. “The economy data still remains at the mercy of the virus.”
Globally, the number of confirmed cases of COVID-19 rose to more than 1.38 million, spreading across more than 100 countries, while deaths topped 78,000, according to data aggregated by Johns Hopkins University. There are more than 378,00 confirmed cases in the U.S. and more than 11,000 deaths, with New York reporting 731 dead, its highest daily rate yet. New Jersey extended its lockdown by 30 days. Japan also declared a state of emergency, as expected, in seven of its prefectures to help direct resources to slowing the spread of the illness.
In U.S. economic news, the NFIB survey, a monthly snapshot of small businesses, found that the optimism index fell in March to 96.4, an 8.1-point decline and the largest monthly decline in the survey’s history.
The survey data come just a week after the U.S. government’s rolled out a coronavirus-rescue package, known as the CARES Act, which initially includes $350 billion in forgivable loans for small businesses.
“The doom and gloom crowd is still out in force, and the Street appears to be betting on at least one more down leg to this correction before a sustained bounce begins,” wrote Mizuho’s U.S. Chief Economist Steven Ricchiuto, in a note Tuesday.
Which stocks were in focus?
Shares of Carnival Corp . (NYS:CCL) rose again Tuesday. The cruise-ship operator’s stock advanced 10.7%, following a 21% Monday rise, after Saudi Arabia’s sovereign-wealth fund disclosed an 8.2% stake in the firm. However, shares have fallen roughly 80% year-to-date. Rivals Norwegian Cruise Lines Holdings Ltd . (NYS:NCLH) and Royal Caribbean Cruises Ltd . (NYS:RCL) ended up sharply.
Beaten-down airline stocks closed mixed Tuesday, including shares of Delta Air Lines Inc. (NYS:DAL) , American Airlines Group Inc . (NAS:AAL) , and United Airlines Holdings Inc . (NAS:UAL) .
Exxon Mobil Corp. said Tuesday that it was reducing its 2020 capex spending by 20% and lowering its cash operating expenses by 30% to combat the effects of lower oil prices.
AT&T Inc . (NYS:T) announced a $5.5 billion term-loan agreement to further insulate it from an economic slowdown and that it expects to keep paying its dividend.
Kohl’s Corp . (NYS:KSS) shares surged 20.1%, after giving back some of its 29% advance early in the session.
Shares o f Wayfair, Inc . (NYS:W) gained 8.4% after an upgrade to buy from neutral at BofA Securities and a price target boost to $103 from $89.
Discount retailer TJX Companies (NYS:TJX) said it would temporarily put most of its retail stores and distribution center employees on furlough after April 11, while the company’s chief executive and executive chair agreed to cut their base salaries by 30% for a set period. Shares rose 1.2%.
How did other markets trade?
In bond markets, the yield on the 10-year U.S. Treasury note (XTUP:BX:TMUBMUSD10Y) rose about 6 basis points to 0.735%.
Crude oil prices settled lower, with the price of a barrel of West Texas Intermediate crude for May delivery (NYM:CLK20) losing $2.45, or 9.4%, to close at $23.63 a barrel, after the Energy Information Administration slashed its U.S. and global benchmark price forecasts by more than 20% for this year. In precious metals, the price of an ounce of gold for June delivery (NYM:GCM20) fell $10.20, or 0.6%, to settle at $1,683.70 an ounce.
The U.S. dollar fell 0.8% relative to a basket of trading peers, according to the ICE U.S. Dollar (IFUS:DXY)
In Europe, stocks finished trading higher, with the Stoxx Europe 600 (STOXX:XX:SXXP) gaining 1.9%, its second day in a row of gains.
In Asia overnight, stocks closed significantly higher. The China CSI 300 (CHINA:XX:000300) rose 2.3%, Hong Kong’s Hang Seng Index (HONG:HK:HSI) added 2.1% and Japan’s Nikkei 225 (NIKKEI:JP:NIK) rose 2%.
<STRONG>Chris Matthews contributed to this article</STRONG>