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TOPLINE
The stock market opened lower on Tuesday, cutting a five-day winning streak, as investors worry that surging coronavirus cases across the country could derail an economic recovery.
Stocks snapped a five-day streak, falling on Tuesday.
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KEY FACTS
The Dow Jones Industrial Average was down 0.8%, over 200 points, at Tuesday’s open, while the S&P 500 fell 0.5% and the tech-heavy Nasdaq Composite lost 0.1%.
Shares of companies that would benefit from a reopening of the economy—including airlines, cruise stocks and some retailers—moved lower as many states continue to see a spike in new coronavirus infections.
Stocks traded briefly off their lows on news that the U.S. government awarded biotech drugmaker Novavax a $1.6 billion contract to develop a coronavirus vaccine, sending the company’s shares 30% higher.
But the stock market’s gains in recent weeks have come amid a backdrop of increasing coronavirus cases across the United States: The number of hospitalizations grew by 5% or more in 23 states over the weekend.
Many states have now paused reopening plans and reimposed lockdown restrictions altogether, amid fears that the country will have to shut down the economy again if the rate of new cases continues.
Key background
The market’s losses followed a strong rally on Monday: The Dow jumped 450 points, while the S&P gained 1.5%. Tech stocks rallied to lift the Nasdaq to a new record high, though they fell on Tuesday.
Crucial quote
Atlanta’s Federal Reserve President, Rahael Bostic, told the Financial Times that the U.S. economic recovery will be “bumpier” as coronavirus cases rise in many states. He warned that economic activity, which rebounded after lockdowns were first lifted, is now “levelling off.”
Further reading
Dow Rises 100 Points After U.S. Economy Adds 4.8 Million Jobs In June (Forbes)
S&P 500 Jumps 0.5% After Pfizer Coronavirus Vaccine News (Forbes)
Tesla Is Now The World’s Most Valuable Car Company With A $208 Billion Valuation (Forbes)
Wall Street Quietly Begins Warning About A Biden Presidency (Forbes)
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