Wall Street Headed Lower After Five-Day Run on Fears Over Virus Surge

investors weigh the risks to the economy from tens of thousands of new coronavirus cases nationwide

Wall Street's main indexes looked set to open lower on Tuesday following the benchmark S&P 500's longest streak of gains this year as investors weighed the risks to the economy from tens of thousands of new coronavirus cases nationwide.

Florida's greater Miami area became the latest U.S. coronavirus hot spot to roll back its reopening while Texas-registered an all-time high in the number of people hospitalized at any one moment with COVID-19 for the eight straight days. Energy stocks including Occidental Petroleum Corp (OXY.N) and Concho Resources (CXO.N) dropped about two percent on worries over fuel demand.

Slight Retracement

It looks like it will be a slight retracement of Monday and Thursday's impressive gains, said Ryan Giannotto, director of research at GraniteShares ETFs in New York.

U.S. stocks have climbed despite an alarming rise in coronavirus cases as a surprise expansion in the U.S. service sector and a record job additions in June are among the slate of upbeat data recently that have bolstered views that an economic recovery is underway. The benchmark S&P 500 .SPX and Nasdaq wrapped up five straight sessions of gains on Monday, with the latter closing at a record level.

Overriding Fears

US stocks

The conundrum of growing cases and rising stock prices indicates that the liquidity from monetary stimulus is overriding fears over the immediate impact of coronavirus on the economy, Giannotto said. At 8:10 a.m. ET, Dow e-minis 1YMcv1 were down 205 points, or 0.78 percent. S&P 500 e-minis EScv1 were down 20.5 points, or 0.65 percent and Nasdaq 100 e-minis NQcv1 were down 33 points, or 0.31 percent.

Novavax Inc (NVAX.O) jumped 33.8 percent as the U.S. government awarded $1.6 billion to the drugmaker to cover testing, commercialization and manufacturing of a potential coronavirus vaccine in the United States.

Travel-related stocks, which were among the hardest hit during lockdowns, fell. United Airlines Holdings Inc (UAL.O) and American Airlines Group Inc (AAL.O) were down 2.6 percent and 2.3 percent, respectively. Royal Caribbean Group (RCL.N) and Norwegian Cruise Line Holdings Ltd (NCLH.N) also dropped about one percent each, even as they announced a joint task force to help develop safety standards for restarting their businesses.