KEY POINTS
- Coronavirus deaths and infections in China, South Korea may have peaked
- European equity markets closed broadly higher
- Treasury yields jumped
U.S. stocks fell on Tuesday, with a dive in the final hour of trading, although South Korea, China reported some positive developments on the coronavirus front.
The Dow Jones Industrial Average fell 26.13 points to 22,653.86, while the S&P 500 slipped 4.27 points to 2,659.41 and the Nasdaq Composite Index dropped 25.98 points to 7,887.26.
At one point during the session, the Dow was up by as much as 900 points.
Volume on the New York Stock Exchange totaled 6.18 billion shares with 2,235 issues advancing, seven setting new highs, and 758 declining, with 15 setting new lows.
Active movers were led by Carnival Corp. (CCL), American Airlines Group Inc. (AAL) and Ford Motor (F)
The rate of coronavirus infections and deaths may have peaked in South Korea and China. South Korea confirmed less than 50 new cases of infection for the second straight day. China recorded no new deaths on Monday for the first time since January.
In the U.S., President Donald Trump said on Monday there's "tremendous light at the end of the tunnel' with ten therapeutic agents in active trials.
"The apex [of virus cases] in New York state is likely imminent as opposed to one month out," said Marko Kolanovic, JPMorgan's global head of macro quantitative and derivatives strategy. "Big data indicated very early on that social distancing is working overall."
"Investors chose to accentuate the positives, as they have been mostly doing since the bear-market low," said Ed Yardeni, president and chief investment strategist at Yardeni Research. "In our opinion, we are in the midst of a Great Rebalancing away from bonds and into stocks. The bear market has most likely discounted a depression-like recession packed into [the second and third quarters]. It certainly hasn't discounted the possibility of an actual apocalyptic depression lasting through at least 2021 and beyond. On the contrary, the market's recent action suggests that investors are betting on an economic recovery starting during [the fourth quarter] and continuing through 2021."
"We still believe that the odds are quite high that the lows from March will be retested and probably undercut before this bear market comes to an end," Matt Maley, chief market strategist at Miller Tabak, said.
"Optimism on the direction of equity markets will be difficult to maintain until we see more clarity on the corporate earnings outlook and until the dispersion of analysts' forecasts subsides," wrote Marija Veitmane, a multi-asset strategist at State Street Global Markets.
Keith Lerner, chief market strategist at Truist/SunTrust Advisory, said the stock market reached its zenith of indiscriminate selling just after hitting its late March lows.
"That's the first part of any type of bottoming process," Lerner said. "Then you start seeing differentiation in the market; you start to see winners and losers as opposed to wholesale selling."
Overnight in Asia, markets were higher. China's Shanghai Composite climbed 2.05%, while Hong Kong's Hang Seng gained 2.12%, and Japan's Nikkei-225 rose 2.01%.
In Europe markets closed higher, as Britain's FTSE-100 jumped 2.19%, France's CAC-40 rose 2.12% and Germany's DAX gained 2.79%.
Crude oil futures fell 5.6% at $24.62 per barrel, Brent crude rose 2.04% at $32.52. Gold futures edged down 0.59%.
The euro rose 0.98% at $1.0898 while the pound sterling gained 0.92% at $1.2344.
The yield on the 10-year Treasury surged 8.88% to 0.736% while yield on the 30-year Treasury gained 3.74% to 1.332%.