MANHATTAN (CN) — The August stock market rally sputtered Tuesday as weakness in Big Tech shares drove the Dow Jones Industrial Average to finish down 0.38% after it was up about 300 points for most of the day.
For the first time in eight days, the S&P 500 fell as well. Despite dropping 0.8%, however, the index is still just 54 points shy of a new all-time high.
The Nasdaq suffered most, falling 1.69% as a rotation continued from technology to companies poised to benefit from a continued reopening.
As noted by Quincy Krosby, chief market strategist at Prudential Financial, however, this rotation “helps the overall health of the market.”
“That’s what’s important now and what’s needed,” Krosby said.
Airlines had been flying high yesterday, with American, United and Delta all up more than 7% on reopening hopes. Delta was up another 1% today but the other carriers were grounded, each losing almost 2%.
Another travel company, Airbnb, announced plans to begin public trading as soon as year-end, suggesting it feels bullish about the resumption of consumer travel.
Investors were buoyed early in the day by indications that coronavirus infections are subsiding as well as an announcement by Russia that it has registered a vaccine, even though the vaccine hasn’t completed its clinical trials and none of the research has been made public.
“The vaccine showed high efficacy and safety,” Russian Health Minister Mikhail Murashko claimed in a news release. “All volunteers developed high titers of antibodies to Covid-19 while none of them had serious complications.”
Russian President Vladimir Putin announced the vaccine on state television and said that one of his daughters had taken it.
But many U.S. scientists were skeptical. “Not sure what Russia is up to but I certainly would not take a vaccine that hasn’t been tested in Phase III,” tweeted Florian Krammer, a microbiology professor at New York’s Mount Sinai Hospital.
“Nobody knows if it’s safe or if it works. They are putting HCWs and their population at risk,” Krammer said, using an abbreviation for health care workers.
Vaccine research is underway at many labs, including Pfizer, Johnson & Johnson, Merck, AstraZeneca, Moderna, Sanofi and GlaxoSmithKline.
As earnings season continued, Simon Property Group, the country’s largest mall owner, reported net income of $254.2 million, or 83 cents a share, well below analysts’ estimates of 98 cents.
On the bright side, though, the company said it had collected 73% of its rents from retailers and 91% of its tenants had reopened their doors. Its stock rose 2.55%.
CEO David Simon said the company would continue trying to acquire distressed retailers such as J.C. Penney and Brooks Brothers. “We’re acquiring inventory at or below cost,” he said, because “there’s profit in there.” Simon rejected the idea that the company was merely “buying into these retailers to pay us rent.”
SoftBank Group announced an $11.8 billion net profit, primarily due to a sale of its stake in mobile carrier Sprint and a rebound in its Vision Fund, the world’s largest technology investment pool. But the company’s ADRs ended the day down 3.58%.
Founder Masayoshi Son said the company planned to stockpile cash to weather the coronavirus crisis.
“Defense is essential in a battle,” he said, recounting how a Japanese warlord named Nobunaga used fences to help samurai soldiers defend themselves against enemies on horseback. “For SoftBank, which has various debts, defense is cash.”
Sysco Corp., a leading restaurant supplier, posted revenue of $8.87 billion, a 42% decline from last year, and an adjusted loss of 29 cents a share. The figures beat analysts’ estimates of $8.19 billion and 39 cents. The stock rose 1.23%.
Stock photography company Shutterstock plummeted almost 15% after announcing that founder Jon Oringer planned to sell $200 million worth of shares and the company itself planned to sell enough to raise an additional $50 million.
Shares of video conferencing company Zoom also plunged, finishing down 7.58% after a regulatory filing became public indicating that Salesforce has sold its stake in the company.
Zoom’s stock, which rocketed higher in the early days of the pandemic, is down 15.6% over the last four days, perhaps another indicator that investors believe the worst of the crisis is over.
Uber and Lyft continued to react to a Monday ruling in California that ordered them to start classifying more than 100,000 drivers as employees rather than independent contractors and give them full employment benefits, including overtime and unemployment insurance. The ruling is on hold pending appeal.
“The vast majority of drivers want to work independently” an Uber spokesperson said. “When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression.”
Uber stock was down 3.28% today. Lyft was down 1.29%.