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Stock rally takes a pause as new COVID-19 cases spike

Video Credit: Reuters Studio
Published on June 17, 2020 - Duration: 01:47s

Stock rally takes a pause as new COVID-19 cases spike

The Dow and S&P 500 snapped three-day winning streaks as a surge in new coronavirus cases in several states gave investors a reason to pause.

Conway G.

Gittens has the wrap.

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Stock rally takes a pause as new COVID-19 cases spike

It was time for a break on Wall Street after a three-day run up.

Investors were coaxed Wednesday into sitting on the sideline as the number of new cases rise sharply in about six U.S. states where stay-at-home restrictions have been relaxed, as hospital numbers spike in six states where stay-at-home restrictions have been relaxed.

The Dow and the S&P posted modest losses, while the Nasdaq managed to hold a small gain.

The cautious tone overshadowed another round of upbeat news on the economy.

Applications for new mortgages surged to 11-1/2 year highs, new housing construction projects bounced higher in May and permits for future projects suggest robust activity to come.

It's news like that - which has helped stocks rally 40 percent since March - that will likely support further moves higher, says Summit Place Financial Advisors President Liz Miller.

"The biggest question of everyone is 'wow this market has come back very strong.

Has it come back too strong?

Is it too far ahead of itself?'

Well I think the market is giving us short-term results.

The market is reflecting the optimism that is coming out of these data points, showing us that investors and consumers are very optimistic and anxious to get our economy going again.

And that's going to get us a good part of the way there." But in a reminder there are still companies struggling out there... Hertz is pulling a planned sale of $500 million worth of new stock.

The bankrupt car rental company came under fire from the U.S. Securities and Exchange Commission for planning to take on new investors at the same time it is in bankruptcy court.

Cruise stocks were docked.

Norwegian Cruise Lines extended a suspension on any voyages through September.

The stock was down roughly 8 percent.

Carnival Corp and Royal Caribbean were down as well.

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