Katie Nixon, chief investment officer at Northern Trust Wealth Management, said that the spike in cases has changed the behaviors of companies like Apple Inc. /zigman2/quotes/202934861/composite AAPL -3.51% , who announced that it was re-closing more stores on Wednesday. The shift in expectations about when businesses can reopen has sparked a mini rotation into stocks that are viewed as benefitting from workers and consumers staying at home.
“Of course, we now know that reopening plans have been changed, with many states and cities reversing course. At the same time, and regardless of what authorities are recommending, we see companies (like Apple) and consumers changing their plans and slowing down,” Nixon said.
“This has led to a ‘re-rotation’ of sorts back to the stocks that proved resilient in a ‘stay at home’ environment,” she explained.
Katie Stockton, market technician and founder of Fairlead Strategies, told MarketWatch that recent wobbles in markets have come during a consolidation phase after an otherwise strong rally for equities since a recent bout of volatility in mid-June.
She described recent trading as “healthy, as it relieved overbought conditions.”
“We’re getting a bit more constructive now, though there’s still what I would consider to be a healthy level of skepticism out there. That can fuel an uptrend whether it makes sense fundamentally or not,“ Stockton said.
Look for news headlines to drive the market from here on, she said, since investors feel like “we don’t have any visibility into the fundamentals of the economy.”
In other economic reports on Thursday, a reading of factory orders showed a 0.8% rise in May, the first in three months.
Which stocks were in focus?
Shares of Tesla Inc. /zigman2/quotes/203558040/composite TSLA -9.27% jumped 8% after a Wedbush analyst boosted his stock price target to $2,000.
PayPal Inc. shares /zigman2/quotes/208054269/composite PYPL -2.85% finished 0.1% lower after an analyst upped his stock price target to $200 from $176.
Alexion Pharmaceuticals Inc. shares slipped 0.1% after the Securities and Exchange Commission said the company would pay $21 million to resolve charges that it paid Russian and Turkish officials to promote its immunosuppressive drug Soliris.
Shares of Moderna Inc . /zigman2/quotes/205619834/composite MRNA -1.76% closed trading 4.9% lower after the STAT News report.
Shares of Lemonade Inc . /zigman2/quotes/219257798/composite LMND -7.10% , the mobile insurance company, soared 139% in its public debut on the New York Stock Exchange Thursday.
How did other assets perform?
West Texas Intermediate U.S. crude for August delivery settled at $40.65 a barrel on the New York Mercantile Exchange, up 2.1%, in part thanks to dwindling inventories. In precious metals, August gold futures rose $10.10, or 0.6%, to finish at $1,790 an ounce.
The 10-year Treasury note yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +0.12% was down 1.2 basis points at 0.670% after the strong jobs report pushed investors into riskier assets. Bond prices move inversely to yields.
The greenback fell 0.1% against a basket of its major rivals, based on trading in the ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY +0.44% .
In European equities, the Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.55% closed 2% higher, and London’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +1.20% finished with a 1.3% gain.
In Asian markets overnight, the Japanese Nikkei /zigman2/quotes/210597971/delayed JP:NIK -0.06% edged up 0.1%, Hong Kong’s Hang Seng /zigman2/quotes/210598030/delayed HK:HSI +0.11% throttled nearly 3% higher, and the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +0.17% closed up 2.1%.