Stocks slipped Tuesday, snapping a seven-day winning streak, hurt by declines in big technology stocks such as Apple and Microsoft.
The Standard & Poor’s 500, the broadest measure of U.S. stocks and the index used as a benchmark for index funds, fell 0.8% to 3,333.69, ending its longest streak of gains in over a year and leaving it 1.6% below its Feb. 19 record high.
The Dow Jones industrial average slumped 104.53 points to 27,686.91. It remains 6.3% below its Feb. 12 peak. The Nasdaq Composite lost 1.7% to 10,782.82.
Gains for banks, industrial and energy companies were offset by drops in big-name tech stocks, which have far outpaced the rest of the market this year as investors bet they could still thrive in a stay-at-home economy.
Stocks initially opened higher on renewed optimism that further stimulus measures could help bolster the U.S. economy. President Donald Trump announced this week that he plans to cut taxes on capital gains and income. On Monday, Treasury Secretary Steven Mnuchin said the White House was open to resuming stimulus talks with Democrats after negotiations broke down last week.
Global markets had received a boost overnight after Russia claimed victory in the race for a coronavirus vaccine after it was the first country to officially register one and declare it ready for use Tuesday, despite less than two months of human testing and not completing final trials.
The World Health Organization has said all vaccine candidates should go through full stages of testing before being rolled out.
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A flood of government spending and monetary stimulus have kept markets rising since March. Now investors are looking to Washington for a fresh lifeline for the U.S. economy, which slid into recession as the pandemic spread in the spring. The S&P 500 had been down nearly 34% in March.
Over the weekend, President Trump announced several stopgap moves to aid the economy after the collapse of talks on Capitol Hill for a bigger rescue package. Investors have been saying the economy needs another big lifeline from Washington, and quickly, after $600 in weekly unemployment benefits for workers from the federal government expired at the end of July.
Trump signed executive actions Saturday to extend the expired benefit for unemployed workers, among other things. The orders, however, were more limited than what investors hoped to see from a full rescue bill for the economy.
“We remain cautiously optimistic about the economy’s reopening progress. In the next few weeks and months, the impact of policy – the latest stimulus bill, school reopenings and the November election – will likely play an outsized role in the markets,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said in a note.
The worldwide confirmed number of coronavirus cases hit 20 million Monday, according to a tally kept by Johns Hopkins University. The U.S. reached another astonishing milestone over the weekend by surpassing 5 million confirmed coronavirus cases. The U.S. has recorded more than 163,000 deaths.
On top of the rising number of coronavirus counts around the world, uncertainty has grown with widening antagonisms between the United States and China, the world’s largest economies.
The latest move in their escalating tensions was China’s announcement of unspecified sanctions against 11 U.S. politicians and heads of organizations promoting democratic causes, including Sens. Marco Rubio and Ted Cruz.
The two sides are scheduled to hold virtual trade talks at the end of the week.
The yield on the 10-year Treasury rose to 0.66% from 0.57% late Monday, a big move.
Oil prices closed lower after being up earlier. Benchmark U.S. crude oil for September delivery fell 0.8% to settle at $41.61 per barrel. Brent crude oil for October delivery fell 1.1% to settle at $44.50 per barrel.
Germany’s DAX jumped 2% while the CAC 40 in Paris also gained 2.4%. Britain’s FTSE 100 rose 1.7% even after new data showed employment dropped by the most since the global financial crisis in 2009.
The Hang Seng in Hong Kong added 2.1%, while the Nikkei 225 climbed 1.9%. In South Korea, the Kospi picked up 1.4%. Sydney’s S&P/ASX 200 advanced 0.5%, while the Shanghai Composite index gave up earlier gains, dropping 1.2%.
Contributing: The Associated Press