Monday, May 20, 2024

Stock indexes edge higher on Wall Street after shaky start

by Associated Press

Stocks edged higher on Wall Street in early trading Monday after a shaky start as investors weigh the risks that rising coronavirus cases could pose to the reopening of businesses shut down due to the pandemic.

The S&P 500 rose 0.2% after initially sliding 0.6% following weakness in overseas markets as the global tally of infections approaches 9 million. Bond yields were mostly lower and the price of gold rose, more signs of caution in the market.

The Dow Jones Industrial Average rose 60 points, or 0.2%, to 25,931 after earlier sliding 203 points. The Nasdaq composite was up 0.4%. Gains in technology companies and utilities outweighed losses in health care, industrial and real estate stocks. Airlines and cruise line operators were among the biggest decliners.

The choppy start to the week comes after the S&P 500 notched its fourth weekly gain in the past five weeks. Investors have been balancing encouraging economic data against uncertainty over whether rising coronavirus cases will undercut hopes that the economy can pull out of its recession relatively quickly as many countries and U.S. states give the green light for businesses to reopen.

American Airlines fell 5% on news that the company plans to raise $3.5 billion including $1.5 billion from selling stock and debt that can be converted to stock. Airlines have been scrambling to raise cash to survive a sharp drop in travel. Alaska Airlines said Monday that June revenue will be down about 80% from a year ago, though that’s better than April’s 87% decline and May’s 83% drop. Alaska Airlines fell 1.4%.

Cruise line operators also fell. Norwegian Cruise Line dropped 5.4%, Royal Caribbean was down 4.7% and Carnival dropped 3.8%. The stocks have been among the most hard-hit as the cruise industry remains shut down due to the coronavirus.

The World Health Organization on Sunday reported the largest single-day increase in coronavirus cases by its count, at more than 183,000 new cases in the previous 24 hours. The U.N. health agency said Sunday that Brazil led the way with 54,771 cases and the US next at 36,617. India confirmed 15,400 new cases.

The United States also reported more than 30,000 new coronavirus cases on Friday and Saturday, with the daily totals their highest since May 1. A large share of the cases are in the South, West and Midwest, where hospitals in some areas are becoming overwhelmed.

Case numbers in South Korea and China have appeared to be moderating after recent outbreaks centered in their capitals.

Great uncertainty remains over whether countries that have been relaxing pandemic-fighting restrictions on travel and business might end up re-imposing broader controls that would slow a recovery from the worst global downturn since the Great Depression in the 1930s.

Even if widespread stay-at-home orders don’t happen, the fear is that scared shoppers may still shy away from stores and businesses may pull back on their own spending.

Investors will get a better look at the state of the economy toward the end of this week, when the government issues data on consumer spending, weekly unemployment aid applications and durable goods orders. On Tuesday, the Commerce Department serves up new home sales figures for May.

The yield on the 10-year Treasury note fell to 0.68% from 0.70% late Friday. It tends to move with investors’ expectations for the economy and inflation.

Oil prices headed higher. A barrel of U.S. crude oil for delivery in July was up 0.6% to $39.97. Brent crude, the international standard, was up 0.3% to $42.34 per barrel.

European markets were trading broadly lower. Britain’s FTSE 100 lost 0.4% and the CAC 40 in Paris fell 0.5%. Germany’s DAX slid 0.6%. Asian markets also fell overnight.

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