United States markets closed up Monday, lifted by gains made by large technology firms and increases in the price of oil. Those gains, however, are tempered by new worries about fresh US-China tensions, and by comments made by business tycoon Warren Buffet over the weekend.
The Dow Jones Industrial Average ended the day 0.1 percent higher, at 23,749.76. The S&P 500 – a proxy for the health of US retirement and college savings accounts – rose 0.4 percent to close at 2,842.74. The tech-heavy Nasdaq Composite Index climbed 1.2 percent to end the day at 8,710.71.
Gains in Microsoft, Apple and Amazon were the biggest lifts for the S&P 500, following mixed reactions last week to reports from big tech names.
The energy sector was the best performing S&P 500 sector, rising 3.7 percent as oil prices gained.
West Texas Intermediate crude for June delivery rose 3.1 percent, above $20 a barrel. Brent crude is up 2.9 percent with prices above $27 a barrel.
Investors are trying to determine what impact the easing of stay-at-home orders by a number of states will have on the US economy. Coronavirus restrictions in the US have caused severe economic pain and sent unemployment skyrocketing. A growing number of economists are warning of an impending economic calamity on the level of the Great Depression of the 1930s.
New York Governor Andrew Cuomo on Monday outlined a phased reopening of business activity in the state hardest hit by the COVID-19 pandemic.
“Can you lift restrictions and begin to phase in economic activity and yet keep the number of cases at bay? That is what the market is focused on right now,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
US Secretary of State Mike Pompeo said on Sunday during an interview with ABC News that there was “a significant amount of evidence” that COVID-19 originated in a Chinese laboratory.
The remarks added to escalating tensions between the US and China over the coronavirus pandemic that has exacted a staggering human and economic toll globally, including in the US, and is casting a long shadow over President Donald Trump’s re-election campaign.
Last week, President Trump said he is considering imposing new tariffs on China.
Despite Monday’s slight market rise, the aviation sector ended lower: American Airlines, Delta, and United Airlines all lost more than five percent of their value.
Buffet said that his company Berkshire Hathaway liquidated all of its aviation investments. It held stakes of 11 percent in Delta, 10 percent in American, 10 percent in Southwest, and 9 percent in United at the end of 2019, according to its annual report.
Shares of Berkshire Hathaway itself fell 2.6 percent and weighed on the S&P 500 after the conglomerate posted a record quarterly net loss of nearly $50bn.
Buffett, whose comments are closely followed by investors, acknowledged at Berkshire’s annual meeting on Saturday that the global coronavirus pandemic could significantly damage the economy and his investments.
“His narrative was relatively sober compared to his posture over the years,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management.
Investors are also digesting a difficult corporate results season. With more than half of S&P 500 companies reporting results so far, first-quarter earnings are expected to have fallen 12.5 percent, according to Refinitiv data.
Shares of Tyson Foods Inc tumbled 7.8 percent after the company said the coronavirus crisis will continue to idle US meat plants and slow production as it reported lower-than-expected earnings and revenue for the quarter.
Data on Monday showed new orders for US-made goods suffered a record decline in March and could sink further as disruptions from the coronavirus fracture supply chains and depress exports.