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S&P Slashes Gains to End Lower as California Shutdown Triggers Tech U-Turn

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imageStock Markets1 hour ago (Jul 13, 2020 04:10PM ET)
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(C) Reuters.

By Yasin Ebrahim

Investing.com – Wall Street ended lower after giving up gains on Monday as a sea of red swept through tech after California moved to shut down all indoor activities.

The S&P 500 fell 0.94%, while the Nasdaq Composite fell 2.13% and the Dow Jones Industrial Average was flat.

California Gov. Gavin Newsom said that all counties in the state must close indoor restaurants, movie theaters and wineries following a surge in coronavirus cases. “We are moving back into a ‘modification mode’ of our original stay-at-home order,” said Newsom. “This is a new statewide action, effective today.”

In another blow to investor optimism over the economic recovery, the Los Angeles School District, the second-largest in the U.S., meanwhile, announced that it would begin the school year exclusively online on Aug. 18. The move comes as the recent surge in the spread of the virus across hotspots including California, Florida, Arizona, and Texas, took the total infections to 3.4 million with about 136,000 deaths nationwide.

Tech cut gains to end the day in the red after FAANG stocks came under heavy pressure after hitting new highs. Apple (NASDAQ:AAPL), which had led the broader move higher erased more than 3% of gains.

The renewed jitters over further lockdown measures offset positive vaccine news.

Pharma giant Pfizer said that two of the four new coronavirus vaccine candidates that it was developing with German-based BioNTech (BNTX) received fast-track designation from the U.S. Food and Drug Administration.

Pfizer (NYSE:PFE) jumped 4%, while Biontech (NASDAQ:BNTX) jumped 10.7%.

The corporate earnings season, which got underway on Monday, also provided investors with clues on the pandemic’s impact on corporate results.

PepsiCo (NASDAQ:PEP) reported second-quarter results that beat consensus estimates on both the top and bottom lines, led by performance in its global snacks and foods business. Its shares ended flat.

A slew of earnings from banks including Wells Fargo (NYSE:WFC), JPMorgan Chase (NYSE:JPM), and Citigroup (NYSE:C) – all of which are set to report quarterly results on Tuesday – will offer further insight into activity on Wall Street with an uptick trading income and higher loan loss provisions expected to garner investor attention.

Casino stocks, meanwhile, caught a bid as on news Macau lifted quarantine requirements.

Wynn Resorts (NASDAQ:WYNN) rose 6%, Las Vegas Sands (NYSE:LVS) was up 6.2%, and MGM Resorts (NYSE:MGM) rose 1.2%.

S&P Slashes Gains to End Lower as California Shutdown Triggers Tech U-Turn

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