- US stocks slid Tuesday as investors continued to weigh on new developments in coronavirus.
- The top three indexes jumped early in the session before reducing gains throughout the afternoon and closing in negative territory.
- New COVID-19 cases appear to be slowing in the United States, Spain and Italy. China reported no new deaths from the virus on Monday for the first time since the start of the epidemic.
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US stocks fell on Tuesday as investors weighed the signs that the coronavirus pandemic is slowing in major economies. The marked early gains fell in afternoon trading before the three indices closed in negative territory.
Recent gains are due to an apparent slowdown in coronavirus cases. The new cases appear to have fallen from the peaks in the United States, Italy and Spain, three countries with severe epidemics. New York Governor Andrew Cuomo said on Tuesday that hospital admissions were slowing, although the state reported its death record in one day.
There are also positive signs in Asia: China reported no new deaths from the virus on Monday for the first time, and new cases in South Korea have slowed.
“The world has finally seen a glimpse of the light at the end of this dark tunnel,” Hussein Sayed, chief market strategist at FXTM, told Business Insider.
Here is where the main American indices were at the close of the market at 4 p.m. AND Tuesday:
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Although they finished the day down, the top three US indices rallied in a technical bull market at the start of Tuesday’s trading session, marking a 20% rally from recent lows.
“I would call it a bear market rally,” Randy Frederick, vice president of trading and derivatives at Charles Schwab, told Business Insider. “If we bounce back so quickly from the bottom and then immediately return to a strong recovery, which frankly we almost did, I fear we will have a second recession. “
American airlines and cruises have progressed. United Airlines was up 2%, while American Airlines was up 8%. Royal Caribbean jumped almost 14%, Norwegian cruises gained more than 10% and Carnival jumped 27% after Saudi Arabia bought a stake in the company on Monday.
However, uncertainty remains about the pace of recovery from the economic downturn caused by coronaviruses. In March, requests to suspend or reduce mortgage payments increased by more than 3,000% as homeowners scramble for relief, according to a report released Tuesday by the Mortgage Brokers Association.
Small business optimism also fell in the most well-known fashion in March, according to the National Federation of Independent Businesses. At the same time, a measure of uncertainty for small businesses has reached its highest level since 2017.
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Secretary of the Treasury Steven Mnuchin said Tuesday afternoon that he had discussed with Congressional leaders the addition of an additional $ 250 billion to the small business loan program. A vote is scheduled for Thursday. Last month, Congress approved $ 350 billion for small businesses as part of CARES ‘record $ 2 trillion law.
Sayed said he believed the markets were re-charging the worst-case scenario due to the virus epidemic and that investors who opted for risky assets were showing that they believed a “V-shaped” recovery would occur. .
“Attractive valuations,” fear of missing “and extraordinary stimulus packages also exaggerate upward price movements,” he said. “However, no one yet knows exactly what damage this virus has already caused to the global economy, to corporate profits and to the type of exit strategies that countries will follow in the weeks to come. “
Markets are also likely to remain volatile as the coronavirus pandemic continues. Even though the Cboe volatility index has dropped from recent highs, it is still “panic level,” according to Frederick.
“Remember that when you are in a period of time like this, you are going to make big movements up and down,” he said.
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