The S&P 500 closed lower on Wednesday as news of spiking pandemic data and the prospect of a new round of economic lockdowns dampened investor optimism over signs of economic recovery. Canada’s TSX also fell, snapping a three-day winning streak, pressured in particular by falling stock prices in the energy sector.
The Dow reversed earlier gains to end lower as well, but tech shares led the Nasdaq to a modest gain.
Worries over a resurgence in the pandemic’s spread persisted, as new coronavirus cases hit a record in Oklahoma just days before President Donald Trump’s expected campaign rally in Tulsa.
The numbers of new cases are rising sharply in about six U.S. states, according to a Reuters analysis, and authorities in Beijing have ramped up mobility restrictions in their efforts to contain a new COVID-19 outbreak.
“There are periodic points of news flow where the positive news will carry the market and negative news will pressure the market,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “It’s a return of health concerns versus economic optimism.”
“There’s a tug of war with headlines,” Sroka added.
Indeed, the indexes were up earlier in the session on news than an inexpensive, common steroid called dexamethasone can help save critically ill COVID-19 patients, according to a clinical trial in Britain, a development that prompted the World Health Organization to update its treatment guidelines.
U.S. Federal Reserve Chair Jerome Powell wrapped up two days of congressional testimony, during which he pledged the central bank will use its “full range of tools” to help that recovery along. But Powell added, “It would be a concern if Congress were to pull back on the support that it’s providing, too quickly.”
On the economic front, while housing starts increased at a slower-than-expected pace in May, building permits saw a more robust rebound and applications for loans to purchase homes surged last week to a near 11-1/2-year high last week, according to separate reports from the U.S. Commerce Department and the Mortgage Bankers Association.
The Dow Jones Industrial Average fell 170.37 points, or 0.65%, to 26,119.61, the S&P 500 lost 11.25 points, or 0.36%, to 3,113.49 and the Nasdaq Composite added 14.67 points, or 0.15%, to 9,910.53. Of the 11 major sectors in the S&P 500, eight ended the session in the red, with energy and financials suffering the largest percentage losses.
Bankrupt car rental firm Hertz Global Holdings announced it would suspend its plan to sell $500 million in new shares after the U.S. Securities and Exchange Commission raised objections to the sale.
The S&P/TSX composite index closed down 87.14 points, or 0.56%, at 15,428.69. Energy shares led decliners, with the sector down 4.31% amid a drop in crude oil prices. Financials fell 0.65%.
Oil prices settled lower on fuel demand worries due to the uptick in coronavirus cases, and as U.S. crude stocks grew again, taking commercial inventories to another all-time high.
Brent crude settled down 25 cents, or 0.6 %, at $40.71 a barrel. U.S. West Texas Intermediate (WTI) fell 42 cents, or 1.1%, to $37.96 a barrel.
U.S. crude inventories rose to a record high last week for a second straight week, reaching more than 539 million barrels. Conversely, distillate stockpiles fell following weeks of significant builds, government data showed.
Gold prices were little changed.
Read more: Stocks that saw action Wednesday - and why
Reuters, Globe staff
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