Stock indexes closed lower Thursday despite hitting fresh intraday highs after a change in the methodology used by China resulted in a sharp rise in COVID-19 cases and deaths.
What did major indexes do?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -4.06% closed down 128.11 points, or 0.4%, at 29,423.3, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX -3.37% lost 5.51 points, or 0.2%, to close at 3,373.94, after establishing an intraday record at 3,385.09. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -3.79% closed 13.99 points, or 0.1% lower, at 9,711.97, after hitting its own intraday record in afternoon dealings at 9,748.32.
Those ending levels still marked the second highest closes on record for all three benchmarks, following each posting record finishes on Wednesday.
What drove the market?
China on Thursday reported 254 new deaths from the virus over the past 24 hours, while the number of new cases jumped 15,152, after the government applied a new diagnostic method in hard-hit Hubei province. The World Health Organization said Thursday that the total deaths from the outbreak stood at 1,369, while the total number of confirmed cases rose to 60,329.
Seema Shah, chief strategist at Principal Global Investors, said that the market may have exhibited a knee-jerk response to fresh reports on the outbreak. “The surge in reported cases reported today is a one-off change due to methodology and by itself, doesn’t imply an acceleration in the pace of infection,” she said in emailed comments.
“However, if the change in methodology does result in a rise in the growth rate of reported cases, market sentiment will inevitably deteriorate, reversing the more upbeat tone of recent days as markets had become increasingly reassured that the virus will soon plateau,” she said.
Meanwhile, in economic news, January consumer prices rose by a modest 0.1%, but ticked 0.2% higher once the figures were stripped out for food and energy prices. U.S. initial jobless claims for the week ending in Feb. 8 edged up 2,000 to 205,000, underlining the strength of the labor market.
On Capitol Hill, a pair of President Donald Trump’s nominees to the Federal Reserve Board of Governors — Judith Shelton and Christopher Waller — faced scrutiny from the Senate Banking Committee.
Which companies were in focus?
Cisco Systems Inc. shares /zigman2/quotes/209509471/lastsale CSCO -4.34% close down more than 5% after it reported second-quarter profit and revenue late Wednesday that came in slightly above Wall Street forecasts.
MGM Resorts International /zigman2/quotes/209932643/lastsale MGM -9.37% shares closed 5.5% lower after the hotel and casino operator announced late Wednesday that Chief Executive Jim Murren will step down when his contract expires. The company also reported fourth-quarter results that disappointed on earnings .