Stocks fell for the first time in four days on Tuesday amid renewed concern over the coronavirus outbreak in New York City.
The Dow Jones Industrial Average traded 130 points lower, or 0.5%. The S&P 500 dipped 0.4% while the Nasdaq Composite slid 0.1%. Those losses put the major averages on pace to snap a three-day winning streak.
Shares of airline companies led the declines. JetBlue, American Airlines and United were all down more than 3%. Delta and Southwest pulled back by 2.5% and 2.4%, respectively.
The major averages fell to their lows of the day after New York City said its daily positive rate of coronavirus tests is back above 3% for the first time in months.
“We’re not out of the woods yet in terms of the coronavirus,” said Peter Cardillo, chief market economist at Spartan Capital Securities. He also noted some investors are taking profits after the market’s solid gains over the previous three sessions.
Tuesday’s decline follows a strong start to the week for stocks during Monday’s session, with the Dow, S&P 500 and Nasdaq Composite popping more than 1% each.
However, September has been a tough month for traders, with the major averages headed for their first monthly decline since March. Month to date, the S&P 500 has dropped 4.6% and the Dow has lost 3.5%. The Nasdaq is down 5.6% over that time period as shares of big tech companies struggle.
David Waddell, CEO of wealth strategist firm Waddell & Associates, said that he saw recent weakness for the market as a needed “comeuppance” for major tech stocks and that stocks were set for near-term volatility while the indexes tread water.
“I think we’re in a sideways period. It’s just we’re going to do it like we’re on a trampoline,” Waddell said. The strategist also said his clients still had a large amount of their assets in cash, suggesting potential support for the market.
Traders also looked ahead to the first debate between President Donald Trump and Democratic nominee Joe Biden set for Tuesday night. Some Wall Street analysts believe the first debate of this cycle could be more consequential for the markets than most debates, with a clear victory by one candidate possibly creating significant market moves.
“Everyone knows what they’re going to get with Trump, for better or worse,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “The question then is what will Biden deliver. If Biden doesn’t kick any balls in his own net then the market will take that as a win for him.”
House Speaker Nancy Pelosi said on Monday night that the Democrats were unveiling a new $ 2.2 trillion stimulus package, smaller than the more than $ 3 trillion proposed earlier in the crisis but still well above what Republican leaders have offered. The new bill would include enhanced unemployment benefits and aid to airlines and state and local governments, according to a summary.
In economic news Tuesday, The Conference Board said consumer confidence jumped much more than expected, hitting a print of 101.8 for September. Economists polled by Dow Jones expected consumer confidence to rise to 90.1 from 86.3 in August.
Don’t miss CNBC and Institutional Investor’s Delivering Alpha conference on September 30, featuring Treasury Secretary Steven Mnuchin, Senator Elizabeth Warren, Alibaba’s Joseph Tsai, Vista Equity Partners’ Robert Smith, J.P. Morgan’s Mary Callahan Erdoes, Inclusive Capital’s Jeff Ubben and more.