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Wall Street continued its dance with a record on Tuesday, as traders took stock of a spate of earnings reports from large American retailers and the latest escalation in trade tensions between the United States and China.
The SP 500 traded close to the 3386.15 closing high that it reached on Feb. 19. The benchmark has hovered just below that record for nearly a week.
Even without the record in hand, Wall Street has been on a remarkable run since late March. The SP 500 has climbed about 50 percent from its lowest point, after having crashed as the coronavirus pandemic froze economic activity around the world.
The rally has come despite a number of obstacles: warnings about the long-term economic damage caused by permanent business closures and layoffs, still rising tension with China and the inability of lawmakers in Washington to agree on another aid package for millions of unemployed Americans.
In part, the gains came as economic data and corporate earnings reports showed that an economic recovery was already underway. On Tuesday, Walmart and Home Depot reported strong results for the second quarter. And data released last week showed that even as coronavirus infections continued to spread, Americans kept shopping in July with retail sales rising 1.2 percent from June.
Also on Tuesday, the Commerce Department reported that construction of new homes in the United States surged nearly 23 percent in July, to the highest annual pace since February.
Still, there were reasons for traders to hold back on Tuesday.
The Trump administration said Monday that it would restrict the ability of the Chinese tech giant Huawei to buy a wider array of chips made or designed with American equipment and software. It marks a tightening of rules first announced in May, applying them to more semiconductors, covering any chips made abroad with American equipment.
In a reminder of the cost of the deep global recession, Norway’s sovereign wealth fund, the world’s largest with more than $1 trillion in assets, reported that it lost more than $21 billion in the first half of the year as stocks and real estate holdings tumbled in value. The decline followed profits of $180 billion last year.
The fund’s deputy chief executive, speaking at a news conference, said the coronavirus’s spread continued to pose a risk to financial markets. “The main thing is the pandemic. It is still a global pandemic. It does not seem to be under control in any shape or form,” said the executive, Trond Grande, Reuters reported.
— Kevin Granville and
Article source: https://www.nytimes.com/live/2020/08/18/business/stock-market-today-coronavirus