Investors were given a dose of reality this week from the Fed, US-China tensions, and jobs and consumer spending data.
Wall Street’s major stock indexes are mixed on Wednesday as Nike jumped to a record high, Tesla’s promise of a more affordable product failed to impress investors, and worries mounted about rising coronavirus cases in Europe and growing political acrimony in the United States.
The Dow Jones Industrial Average was up 0.21 percent at 27,344.29 in mid-morning trading in New York. The S&P 500 – a gauge for the health of US retirement and college savings reports – was down 0.38 percent while the tech-heavy Nasdaq Composite Index was 0.88 percent in the red.
Shares of Nike, the world’s largest athletic shoemaker, jumped to a record high of $130 at the opening bell after reporting stellar earnings for the quarter ending August 31, driven by online sales that soared during lockdowns as people opted for more comfortable athletic wear. Sales in China, where businesses opened up much earlier than in other parts of the world, shot up 6 percent.
The stock was still up more than 9 percent at mid-morning on Wall Street.
Shares of Johnson and Johnson were up more than 1 percent after the drug giant announced it has started phase three trials of a potential coronavirus vaccine.
Investors are hunting for fresh opportunities in a market where the gilding is starting to flake off of tech shares that were the golden performers of the market rebound this year.
Apple, Amazon, Netflix and Google-parent Alphabet slipped again at opening on Wednesday, while Facebook and Netflix gained slightly.
Investors were also not impressed with Tesla after Chief Executive Officer Elon Musk promised to deliver a sub-$25,000 mass-market model within three years at the much-awaited “Battery Day” event on Tuesday.
Shares of Tesla Inc were trading down 5.3 percent at mid-morning in New York.
Banks also took a tumble earlier this week.
Dow financials were down 3 percent on Wednesday after opening the trading week on a sour note following the publication of an investigation by BuzzFeed and the International Consortium of Investigative Journalists based on a cache of leaked documents revealed that several major banks had transferred more than $2 trillion in suspect funds between 1999 and 2017.
Citigroup introduced a new narrative into the financials mix on Wednesday, announcing that plans to set aside $1bn to support initiatives that help close the racial wealth gap. Citi plans to focus on providing greater access to banking in communities of colour, increase investment in Black-owned businesses and expand homeownership among Black Americans.
Stirring above individual companies and sectors though are mounting concerns about a US economic recovery that appears to be decelerating and growing political acrimony that is making a fresh round of virus relief aid for US businesses and households even more elusive.
With the death of Supreme Court Justice Ruth Bader Ginsberg, growing political tensions have only further lowered the chances of legislators coming together to pass fiscal relief.
Concerns were also mounting as the US heads into the flu-heavy fall and winter seasons. More companies including big banks are suspending their return-to-work plans.