S&P 500 down from five-week high as Covid-19 fears weigh on investors

The Dow Jones Industrial Average fell 123.53 points, or 0.46 per cent, at the open to 26,746.57

Wall Street's main indexes fell on Thursday with the S&P 500 slipping from a five-week high as concerns about the economic toll from rising coronavirus cases nationwide were amplified by data showing elevated levels of unemployment claims.

US retail sales increased more than expected in June, but a resurgence in new Covid-19 cases is chipping at the budding recovery, keeping 32 million Americans on unemployment benefits.

The jump in domestic case loads has forced states such as California to shut down again, sparking fears of more business damage and slowing the pace of a Wall Street rally. The S&P 500 is about 5.8 per cent away from its record high hit in February.

Rounding up earnings reports of big banks, Bank of America Corp fell 1.7 per cent after its second-quarter profit more than halved, while Morgan Stanley rose 3.5 per cent after posting a record quarterly profit.

"There's going to be a little bit of a tug-and-pull based on the data and earnings, but I don't see a big move in the market in either direction in the next several weeks," said Carlton Neel, chief executive officer of investment research firm Chaikin Analytics in Philadelphia.

Many market experts also pointed out that the benchmark S&P 500 is struggling to rise above 3,230 points, its breakeven level for the year.

At 11:02 a.m. ET, the Dow Jones Industrial Average was down 61.49 points, or 0.23 per cent, at 26,808.61, the S&P 500 was down 21.28 points, or 0.66 per cent, at 3,205.28. The Nasdaq Composite was down 169.82 points, or 1.61 per cent, at 10,380.68.

The tech-heavy Nasdaq underperformed the S&P 500 for the fifth straight session, while S&P's cyclical sectors - financials, industrials and materials- were in favor.

"This is an early indication of good signs that money is now flowing away from completely overbought Nasdaq into those names that will bode well when the economy starts finding more of a solid footing," said Andrew Smith, chief investment strategist, Delos Capital Advisors based in Dallas, Texas.

Twitter Inc fell 1.5 per cent as hackers accessed its internal systems to hijack some of the platform's top voices including US presidential candidate Joe Biden, reality TV star Kim Kardashian West, former US President Barack Obama and billionaire Elon Musk and used them to solicit digital currency.

American Airlines dropped 5.2 per cent as it sent 25,000 notices of potential furloughs to frontline workers and warned that demand for air travel is slowing again.

Tesla Inc slipped 4.5 per cent as its vehicle registrations nearly halved in the US state of California during the second quarter, according to data from a marketing research firm.Declining issues outnumbered advancers for a 1.18-to-1 ratio on the NYSE and for a 1.63-to-1 ratio on the Nasdaq.

The S&P index recorded 27 new 52-week highs and no new low, while the Nasdaq recorded 65 new highs and nine new lows.