Stocks bounced off the morning’s lows climb into positive territory, with the technology sector and New York City’s move toward reopening various businesses providing some support for modest gains to start the week.
- The S&P 500 gained 0.01%.
- The Dow Jones Industrial Average retreated 0.45%
- The Nasdaq Composite advanced again, closing higher by 0.78%
- With tech once again leading the way, Apple (NASDAQ:AAPL) was the top performer in the Dow, gaining 1.83%.
On a day that was relatively light on news specific to marquee stocks, Covid-19 news largely took center stage, with President Trump urging businesses to reopen to get the flailing U.S. economy moving in the right direction again.
Globally, there are some positive signs. Italy, the Eurozone’s third-largest economy and the region’s Covid-19 hotspot, reported its lowest number of novel coronavirus cases today in over two months. Meanwhile, the U.K. today revealed an extensive plan to reopen its economy.
Still, it wasn’t a particularly hot day for equities, as just 13 of 30 Dow names were higher in late trading and only three, including Apple, were up 2% or more.
Lack of Enthusiasm
Keeping with recent antics, Boeing (NYSE:BA) declined today on what should have been perceived as good news. In fact, the stock was the second-worst performer in the Dow despite news that the company will resume production of the controversial 737 Max jet next month.
The plane has been grounded since March 2019, and the June time frame for resuming production was expected on Wall Street after a series of disappointments on that front last year.
But in the wake of the novel coronavirus, the issue for Boeing isn’t so much about production of the 737 Max, or any other jet for that matter. It’s more about the new outlook for the airline industry, which isn’t rosy, to say the least.
By some estimates, it could be 2023 or 2024 before demand for air travel returns to pre-virus levels. That’s a long time to wait for Boeing stock investors.
I mentioned Disney (NYSE:DIS) many times last week, and the stock is worth highlighting again today: CEO Bob Chapek said the company plans to boost capacity at its Shanghai theme park by 5,000 people per week until it reaches 30% capacity.
The park reopened today at minimal scale. That’s a step in the right direction, but it’s not a stretch to say that at this point, Disney needs Disneyland or Disney World to soon reopen and ESPN desperately needs to air something other than The Last Dance, like say, some live American sports, to convince investors there’s near-term upside here.
Blue-chip pharmaceuticals name Pfizer (NYSE:PFE) was tussling with Apple for top honors in the Dow today, following reports that surfaced late last Friday that the healthcare company is outsourcing production of some of its other drugs so that it can focus on its Covid-19 efforts with partner BioNTech (NASDAQ:BNTX).
If that vaccine pans out, Pfizer believes it could land emergency use clearance from regulators by October and distribute 20 million doses of the vaccine by the end of this year.
Bottom Line on the Dow Jones Today
It’s impossible to ignore that the S&P 500 is up 30% from its March trough, but some market observers say caution is warranted.
Citing “$103 billion in expected bank loan losses in the next four quarters, lack of buybacks, dividend cuts, and domestic and global political uncertainty,” Goldman Sachs warns that riskier assets may not be out of the novel coronavirus woods just yet.
Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities.