Stocks Tumble as Investors Scour Grim Virus News for Silver Lining

People wearing face masks take an escalator to the second floor of the Arden Fair Mall in Sacramento, Calif., on May 29. (AP Photo/Rich Pedroncelli, File)

MANHATTAN (CN) — Despite hoping to finish out the last trading day in spring with a positive outing, Wall Street petered out on Friday.

By the closing bell, the Dow Jones Industrial Average fell 207 points, and it sits only slightly higher than where it closed last Friday. The S&P 500 also slipped slightly into negative territory, finishing 30 points higher than where it had closed last week.

The Nasdaq, which at one point flirted with crossing the 10,000-point threshold again, had a better day, though it’s arguable if gaining 3 points could be considered good.

Many owe the recent flattening market to both a quagmire on Capitol Hill over further stimulus packages and a spike in Covid-19 cases — neither of which managed to trip up markets earlier in the spring. 

“Despite the negative impact on numerous businesses due to the lockdowns caused by Covid-19, the percentage of Buy ratings on S&P 500 stocks has actually increased since the start of the year,” John Butters, senior earnings analyst at FactSet, wrote Thursday.

He noted that, in early January, 50.6% of S&P 500 stocks had “buy” ratings, while the percentage peaked at more than 54% in early April. Buy ratings currently stand at about 52%. 

Wall Street has been treading water waiting for further action from Capitol Hill, as unemployment has leveled off but remains high and several stimulus programs begin to phase out. 

The uptick in Covid-19 cases also has kept Wall Street bulls in check and has caused some in the business community to rethink their summer strategies. On Friday, Apple reportedly announced it would again shutter stores in Arizona, Florida, and North and South Carolina due to the increase in coronavirus cases.

“We take this step with an abundance of caution as we closely monitor the situation, and we look forward to having our teams and customers back as soon as possible,” Apple said in a statement. 

In Dallas, commissioners ordered businesses to require customers and employees to wear masks or face $500 fines

Even more shockingly, the Cruise Lines International Association announced on Friday that all its members would be voluntarily extending a freeze on cruise operations from U.S. ports until September 15, long after the U.S. government’s “no sail” order expires on July 24. The association’s membership includes Royal Caribbean, Carnival and Norwegian Cruise Lines. Shares in those companies lost 5% to 6% by the market close.

“It is increasingly clear that more time will be needed to resolve barriers to resumption in the United States,” the association said a statement.

“We also feel it is appropriate,” it added, “to err on the side of caution to help ensure the best interests of our passengers and crewmembers.”

More than 8.5 million people have been infected by Covid-19 worldwide, while 457,000 have died, according to data compiled by Johns Hopkins University. In the United States, 2.2 million people have contracted Covid-19, while roughly 119,000 have died.

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