Wall Street turns mixed as leaderboard flips upside down

Stock indexes are mixed on Wall Street Wednesday, as hopes for a coming economic revival turn the market’s leaderboard upside down.

Banks and retailers were helping to lead the way on hopes that life can get closer to what it was like before the coronavirus pandemic as governments relax stay-at-home orders, after plummeting to some of the market’s worst losses earlier this year.

But losses for big tech stocks and other, earlier market winners of the stay-at-home economy were holding the gains in check Wednesday. They’re also some of the most valuable companies in the stock market, which gives their movements outsized sway.

Even though most stocks in the S&P 500 were higher, the index was up only 0.1%, as of 10:30 a.m. Eastern time. The Dow Jones Industrial Average was up 211 points, or 0.8%, at 25,206. The Nasdaq composite, which is full of technology stocks, was down 0.9%.

The movements followed up on strong gains in Europe, where authorities proposed a 750 billion euro ($825 billion) recovery fund to help carry the region through the recession caused by the response to the coronavirus pandemic. Asian stocks were mixed, as tensions between the United States and China over the independence of Hong Kong weighed on markets there.

The S&P 500 is back to where it was in early March, at the start of its spring sell-off on worries about the coming steep recession. It’s now down only about 10% from its high in February, recovering from a nearly 34% drop in March.

Massive aid from the Federal Reserve helped start the rally in late March, which has built more recently on hopes that economic growth can return later this year as governments slowly relax stay-at-home restrictions. In recent weeks, stocks whose profits are most closely tied to the strength of the economy have been showing more life.

Hopes for potential COVID-19 vaccines under development have also helped propel stocks.

Nordstrom jumped 10.8% for one of the strongest gains in the S&P 500, as retailers helped lead the way on hopes that reopening economies will mean more people heading back to stores. Gap and Kohl’s also each rose 6%.

Banks were also stronger on hopes that business reopenings could limit the wave of loan defaults investors had been worrying about. Financial stocks in the S&P 500 rose 2.9% for the largest gain among the 11 sectors that make up the index.

JPMorgan Chase rose 3.8%, Bank of America gained 3.8% and Citigroup jumped 5.3%.

But losses for big tech tempered the market’s advance. They had been stalwarts earlier in the market’s sell-off, holding up better than the rest of the market on the belief that they can continue to make profits even if everyone remains hunkered at home.

Microsoft slipped 2.5%, Amazon lost 2.1% and Nvidia dropped 6.8%. All three, though, remain up at least 12% for the year so far.

In Europe, Germany’s DAX returned 1.7% and France’s CAC 40 rose 1.7% after the announcement of the region’s recovery fund. The president of the European Commission called it “an ambitious answer,” though it still needs to be endorsed by every country in the European Union. About two thirds of the fund would take the form of grants, while the rest would be loans.

In Asia, Japan’s Nikkei 225 rose 0.7%, but other markets were weaker. The Hang Seng in Hong Kong slipped 0.4%, and stocks in Shanghai lost 0.3%. U.S. officials have been critical of China’s response to the coronavirus outbreak, and the latest front in increased tensions between the two centers on China’s control over Hong Kong.

In the bond market, the yield on the 10-year Treasury note fell to 0.66% from 0.69% late Tuesday.

U.S. crude oil for delivery in July fell 4.7% to $32.75 per barrel. Brent crude, the international standard, slipped 3.2% to $35.55 per barrel.

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