New COVID-19 cases appeared to be decelerating in the US, Spain, and Italy. Markets wrestled with the outlook for the economy and wondering how earnings and the economy that might be impacted when the virus fades. The initial strength on Wall Street came as traders reacted to recent signs that the spread of the COVID-19 cases appeared to be decelerating in the US, Spain, and Italy. On Monday, China reported no new deaths from the virus for the first time since the outbreak began.
Also, markets were upbeat after New York, Gov. Andrew Cuomo that daily hospitalizations were plateauing in the state, even as he noted that the more-volatile pace of deaths higher. So far, nearly 5,500 people have died from the virus in the state. Meanwhile, Dallas Fed President Robert Kaplan said that manufacturing, trade and business investment are likely to drag on growth after the pandemic subsides. Kaplan described the potential impact from consumer trends, due to closures and petering personal activity to limit the contagion as "somewhat of a body blow."
Buying interest waned shortly after the start of trading, however, with some traders likely seeing the upward move as overdone following the rally on Monday. Stocks subsequently gave back ground in afternoon trading as New York Governor Andrew Cuomo revealed that coronavirus deaths in his state spiked by 731 on Monday, reflecting the biggest one-day increase. Cuomo cautioned that the number of deaths is a lagging indicator, noting that the pace of growth in hospitalizations and intensive-care admissions has still slowed in recent days.
Pharmaceutical stocks showed a significant move to the downside over the course of the session, with the NYSE Arca Pharmaceutical Index slumping by 1.7%. Software, biotechnology and brokerage stocks also came under pressure as the day progressed, contributing to the pullback by the broader markets. On the other hand, considerable strength remained visible among housing stocks, as reflected by the 3.3% jump by the Philadelphia Housing Sector Index.
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