Wall Street dips after five-day run on fears over coronavirus surge

Wall Street's major indexes slipped on Tuesday following the benchmark S&P 500's longest streak of gains this year as investors worried about the tens of thousands of new coronavirus cases nationwide.

Florida's greater Miami area became the latest US coronavirus hot spot to roll back its reopening, while Texas registered an all-time high in the number of people hospitalized at any one moment with Covid-19 for an eighth straight day.

Energy stocks dropped 2 per cent on worries over fuel demand while travel-related stocks, which were among the hardest hit during lockdowns, also fell. The S&P 1500 airlines index shed 4.2 per cent.

The conundrum of growing cases and rising stock prices indicated that the liquidity from monetary stimulus is overriding fears over the immediate impact of coronavirus on the economy, said Ryan Giannotto, director of research at GraniteShares ETFs in New York.

US stocks have climbed despite an alarming rise in coronavirus cases as a surprise expansion in the US service sector and a record job additions in June are among the slate of upbeat data recently that have bolstered views that an economic recovery is underway.

The benchmark S&P 500 and blue-chip Dow Industrials have risen about 45 per cent from their March lows and are now about 6 per cent and 11 per cent from their record levels hit in February. The Nasdaq reclaimed its record high last month.

The S&P 500 e-minis triggered a "golden cross" pattern, when the 50-day moving average crosses above the 200-day moving average, which could portend more gains for stocks in the short term.

At 10:00 a.m. ET, the Dow Jones Industrial Average was down 208.12 points, or 0.79 per cent, at 26,078.91, the S&P 500 was down 11.52 points, or 0.36 per cent, at 3,168.20, and the Nasdaq Composite was down 6.22 points, or 0.06 per cent, at 10,427.43.

Gains for technology and communications services stocks capped declines on the S&P 500.

Novavax Inc jumped 30.6 per cent as the US government awarded $1.6 billion to the drugmaker to cover testing, commercialization and manufacturing of a potential coronavirus vaccine in the United States.

Royal Caribbean Group and Norwegian Cruise Line Holdings Ltd dropped 3.2 per cent and 3.4 per cent each, even as they announced a joint task force to help develop safety standards for restarting their businesses.

Declining issues outnumbered advancers for a 3.77-to-1 ratio on the NYSE and a 2.91-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and no new low, while the Nasdaq recorded 46 new highs and nine new lows.