S&P 500 closes lower as COVID-19 resurgence casts a shadow on sentiment

NEW YORK (Reuters) – The S&P 500 ended lower on Friday after an up-and-down session as investors weighed spiking cases of COVID-19 and Apple Inc’s announcement of fresh store closures against anticipated stimulus and continued economic recovery.

The S&P 500 ultimately settled in the red, along with the blue-chip Dow, while the tech-heavy Nasdaq closed modestly higher.

“You’ve got these dueling forces with Fed stimulus and the consumer spending again on one side, and on the other side the resurgence (of COVID-19) in pockets of areas around the globe,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.

Apple Inc announced it is temporarily shutting some stores again in Florida, Arizona, South Carolina and North Carolina, which have seen a spike in coronavirus cases in recent days.

“Apple is the canary in the coalmine with respect to other businesses,” Keator added. You’ll start to see other businesses do similar things in some of the states where we’re seeing the virus reemerge.”

“(But) there’s also a feeling that the Fed is acutely aware of what’s going and will help where and when needed,” Keator said.

New cases of COVID-19 set records across at least six U.S. states, and mandated mask use is becoming more common as economies continue reopening. China, where the pandemic originated but had been contained, also reported an uptick in new cases of the disease.

Still, for the week, the S&P 500, the Dow and the Nasdaq posted solid percentage gains.

The S&P 500 and the Dow are now about 9% and 13% shy of their respective all-time highs reached in February. The tech-heavy Nasdaq stood about 1% below its last closing high reached on June 10, after breaching that level earlier in the session.

Trading volume is typically light on summer Fridays as investors head into the weekend.

But Friday marked “quadruple witching,” in which futures and options expiries occur, and that typically translates into elevated volume and liquidity. The S&P is synchronizing its delayed rebalancing to take advantage of that liquidity.

In a video conference, U.S. Federal Reserve Chair Jerome Powell warned the economic recovery from the pandemic is set to be challenging and there will be no quick fix.

Unofficially, the Dow Jones Industrial Average fell 207.54 points, or 0.8%, to 25,872.56, the S&P 500 lost 17.64 points, or 0.57%, to 3,097.7 and the Nasdaq Composite added 3.07 points, or 0.03%, to 9,946.12

Airlines, hit particularly hard by the economic lockdowns, were down sharply.

Shares of AMC Entertainment Holdings Inc dropped after the world’s largest movie theater operator announced that it would begin reopening theaters but reversed its early decision to allow customers not to wear face masks.

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