Stocks take breather as Nasdaq slips from record levels

Economically-sensitive names led Tuesday selloff

Stocks reversed course on Tuesday, snapping their five-day winning streak, as investors booked profits amid concerns the rally has gone too far, too fast.

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TickerSecurityLastChangeChange %
I:COMPNASDAQ COMPOSITE INDEX11010.982553-97.09-0.87%
AAPLAPPLE INC.444.45-10.34-2.27%
AMZNAMAZON.COM INC.3,167.46-57.54-1.78%

The tech-heavy Nasdaq Composite, which hit an intraday record, slipped 0.86 percent as investors sold names including Apple and Amazon which were hovering near their own peaks.

TickerSecurityLastChangeChange %
I:COMPNASDAQ COMPOSITE INDEX11010.982553-97.09-0.87%
SP500S&P 5003351.28+2.12+0.06%
BABOEING COMPANY170.02-2.18-1.27%
CATCATERPILLAR INC.134.92+0.53+0.39%

The S&P 500 fell 1.08 percent and the Dow Jones Industrial Average dropped 1.51 percent, led by the more economically-sensitive names including industrials such as Boeing and Caterpillar.

The selling came as concerns resurfaced that the global economy may take longer to recover from the damage caused by the COVID-19 pandemic.

The Organization for Economic Cooperation and Development warned on Tuesday that global unemployment could reach 12.9 percent this year and not return to pre-pandemic levels until 2022 at the earliest.

Looking at stocks, drugmaker Novavax was awarded $1.6 billion as part of the U.S. government’s Operation Warp Speed program which aims to develop a COVID-19 vaccine as soon as this year. The money will help fund late-stage trials of the drug maker’s experimental vaccine and depending on success, secure 100 million doses for the American people.

TickerSecurityLastChangeChange %
NVAXNOVAVAX INC.170.29+2.79+1.67%
REGNREGENERON PHARMACEUTICALS INC.620.21-1.00-0.16%

Fellow drugmaker Regeneron was awarded $450 million for the manufacturing and supply of its experimental antibody cocktail, which if proven successful could begin initial doses this summer.

Meanwhile, United Airlines told employees that furloughs were possible as bookings fell after New York, New Jersey and Connecticut mandated visitors from states hit hard by COVID-19 to a 14-day quarantine, according to The Wall Street Journal. Rivals American Airlines and Delta Airlines fell in sympathy.

TickerSecurityLastChangeChange %
UALUNITED AIRLINES HLDG.34.33-0.07-0.20%
DALDELTA AIR LINES INC.27.18+0.10+0.37%
AALAMERICAN AIRLINES GROUP INC.13.03-0.01-0.08%

Elsewhere, social media companies Facebook, Google and Twitter have paused processing government requests for user data in Hong Kong until they can further assess the national security law passed last week by Beijing.

TickerSecurityLastChangeChange %
FBFACEBOOK INC.268.44+3.16+1.19%
GOOGLALPHABET INC.1,498.37-6.58-0.44%
TWTRTWITTER INC.37.14-0.55-1.46%

Tesla bucked the downtrend after its price target was raised to $740, up from $650, at Morgan Stanley due to a “resilient” second quarter that makes the stock “less risky/stronger financially” than its rivals. The firm said shares, which have closed in record territory for five straight days, could hit $2,070 in a bull case scenario.

TickerSecurityLastChangeChange %
TSLATESLA INC.1,452.71-36.87-2.48%

On the commodities front, West Texas Intermediate crude oil was little changed, closing at $40.62 a barrel, while gold jumped to $1,804.20 an ounce, its highest since September 2011.

U.S. Treasurys gained, pushing the yield on the 10-year note down by 3.5 basis points to 0.648 percent.

In Europe, Britain’s FTSE paced the decline, down 1.53 percent, while Germany’s DAX and France’s CAC were lower by 0.92 percent and 0.74 percent, respectively.

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Asian markets finished mixed with China’s Shanghai Composite adding 0.37 percent while Hong Kong’s Hang Seng slid 1.38 percent and Japan’s Nikkei lost 0.44 percent.