U.S. Stock Indexes Close Moderately Lower on a Record Weekly Jump in Global Covid Infections

The S&P 500 Index ($SPX) on Monday closed down -0.53%, the Dow Jones Industrials Index ($DOWI) closed down -0.36%, and the Nasdaq 100 Index ($IUXX) closed down -0.96%.

U.S. stock indexes on Monday posted moderate losses as they consolidated below last Friday’s new all-time highs. A record jump in weekly new Covid infections weighed on the overall market on Monday.Losses were limited as the market awaits the quarterly corporate earnings season that gears up this week.

Dragging down the technology sector on Monday was a -7% plunge in Peloton Interactive (PTON) after U.S. regulators on Saturday warned consumers to stop using Peloton’s Tread+ exercise machine if there are young children or pets at home due to injuries from the machine. Also, Tesla (TSLA) closed down more than -3% Monday after a crash Saturday of a Tesla Model S in Texas, which was reportedly driverless and killed two passengers.

A slide in tobacco stocks on Monday kept the pressure on the S&P 500 as Altria Group (MO) closed down more than -6% on news that the Biden administration was said to consider requiring tobacco companies to lower the nicotine amount of all cigarettes sold in the U.S. to levels at which they would be no longer addictive. Philip Morris International (PM) closed down more than -1% on the news.

Strength in auto-parts retailers on Monday limited losses in the S&P 500, as O’Reilly Automotive (ORLY) closed up +0.6% Monday after a weekend article in Barron’s said that with the pace of Covid vaccinations accelerating in the U.S., more people will be driving, and auto-part retailers should benefit. Autozone (AZO) also closed up +0.6% Monday on the news. 

Monday’s global economic data was mixed for stocks. On the negative side, Eurozone Feb construction output fell -2.1% m/m, the biggest decline in 5 months. On the positive side was strong Japanese trade data after Japan Mar exports rose +16.1% y/y, stronger than expectations of +11.4% y/y and the largest increase in 3-1/4 years. Also, Japan Mar imports rose +5.7% y/y, stronger than expectations of +4.7% y/y.

Monday’s monthly report from the Bundesbank was bearish for stocks as the report said that "economic output in Germany contracted in the first quarter of this year" due to prolonged lockdown measures and a VAT (value-added tax) increase that contributed to reduced private consumption.

The stock market continues to be undercut by the rising global Covid statistics. Weekly new global Covid infections for the week ended April 19 rose +12% w/w to +5.2 million, the most since the pandemic began.Also, new Covid infections in India climbed to a record of 273,810 on Monday. Globally, Covid infections have risen above 142.116 million, while deaths have exceeded 3.035 million.

The VIX S&P 500 Volatility Index ($VIX) on Monday rose to a 2-week high of 18.61 and finished the day up +1.04 to 17.29, recovering from last Wednesday’s 13-3/4 month low of 15.38.