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 /zigman2/quotes/210598065/realtime DJIA +1.12% lost 26.13 points, or 0.1%, to finish at 22,653.86, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.56% shed 4.27 points, or 0.2%, to end at 2,659.41, and the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.22% 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.