U.S. stocks closed lower Tuesday, giving up early gains, as technology stocks took a hit ahead of earnings reports while investors weighed moves to reopen the economy in coming weeks.
How did major indexes fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.47% lost 32.23 points, or 0.1%, to end at 24,101.55, snapping four days of gains. The S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.30% shed 15.09 points, or 0.5%, to finish at 2,863.39. The Nasdaq Composite index /zigman2/quotes/210598365/realtime COMP -0.24% dropped 122.43 points, or 1.4%, closing at 8,607.73.
At session highs, the Dow was up 378.46 points, or 1.6%, the S&P 500 rose 42.67, or 1.5% and the Nasdaq Composite index advanced 100.41, or 1.2%.
What drove the market?
Investors also parsed the latest round of corporate earnings and prepared for announcements from the five largest firms by market capitalization in the coming days.
Kicking things off after the bell Tuesday was Google parent Alphabet Inc . /zigman2/quotes/205453964/composite GOOG -0.13% , which reported a “significant slowdown” in ad sales and lower profits than expected. Facebook Inc . /zigman2/quotes/205064656/composite FB -0.55% and Microsoft Corp . /zigman2/quotes/207732364/composite MSFT +0.25% will announce Wednesday afternoon, while Apple Inc . /zigman2/quotes/202934861/composite AAPL -0.06% and Amazon.com Inc . /zigman2/quotes/210331248/composite AMZN -0.49% will report Thursday.
These largest stocks in the S&P 500 index are all up 13% during the past month and make up a larger share of the S&P 500 than at any point in more than 30 years, giving them an outsized role in determining moves in the major benchmarks. A pullback in these names Tuesday could be the result of investor positioning ahead of these reports, said Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research.
“If you think about the market cap of those names specifically, the impact they have, and having the earnings happen around the same time, it can really move things around,” Frederick said.
Sahak Manuelian, managing director of equity trading at Wedbush Securities said that month-end dynamics also are likely coming into play.
“You probably start to see some guys looking to take some chips off,” he told MarketWatch. “Considering everything that’s been going on since the beginning of the year, to be down 11% or 12% is not too bad.”
For April so far the Dow is up 9.97%, the S&P 500 up 10.79% and Nasdaq up 11.79%.
However investors were also weighing moves to ease restrictions on economic activity.
Notable states announcing a relaxation of restrictions on economic activity include Ohio and Pennsylvania . Washington State, which was an initial coronavirus hot spot, will allow greater outdoor recreation , including hunting, fishing and golf starting on May 5.
“There also are a lot of folks out there saying the downturn is going to be much deeper and probably last longer than many had originally predicted,” said Chris Gaffney, president of world markets at TIAA Bank, in an interview with MarketWatch.
The global case tally for COVID-19 climbed to 3.07 million on Tuesday, according to data aggregated by Johns Hopkins University. The death toll rose to 213,273.
Dr. Anthony Fauci, a top White House health advisor and the nation’s top infectious disease expert, may have helped cool the risk-taking mood, Gaffney said.