S&P 500 turns negative after hitting intraday record high

The S&P 500 gave back its earlier gains on Tuesday after briefly breaking above an all-time high that was set before the coronavirus pandemic sent the broader market index tumbling. 

The index traded 0.1% lower after it surpassed an intraday record of 3,393.52 set on Feb. 19. The S&P 500’s move into record territory came after the index flirted with its all-time closing high of 3,386.15 for more than a week. 

The Nasdaq Composite also hit a record, trading 0.1% higher. The Dow Jones Industrial Average lagged, falling 104 points, or 0.4% as Home Depot and Walmart both dipped.

Amazon shares outperformed, rising nearly 3%. Netflix and Alphabet both gained more than 0.8%. Consumer discretionary was the best-performing sector in the S&P 500, rising more than 1%. 

Earlier this year, the S&P 500 tumbled more than 30% from its February record as the coronavirus pandemic sent profit expectations and economic activity tanking. However, the benchmark index for the U.S. stock market did not stay down for long. 

Since hitting a 52-week low on March 23, the S&P 500 has skyrocketed more than 54%. Those gains have been largely driven by sharp advances in Big Tech shares. Facebook, Amazon, Apple, Netflix and Microsoft are all up at least 27% year to date. Google-parent Alphabet has jumped more than 14% in that time period. 

The market’s rip-roaring rally back into record territory also came on the heels of unprecedented fiscal and monetary stimulus. The Federal Reserve slashed the overnight U.S. rate to zero as the pandemic first hit and launched an open-ended quantitative easing program. Lawmakers, meanwhile, pushed through trillions of dollars worth in unemployment assistance and direct payments to Americans, among other benefits. 

“Equity markets are reflecting the massive monetary and fiscal stimulus that has been injected over the past four months,” said Shannon Saccocia, chief investment officer at Boston Private. “Couple that with a more robust economic recovery than what was expected at the depths of the crisis, and interest rates once again at zero, and the rationale to diversify away from risk assets is hard to pinpoint.”

But the market struggled to break out over the past week, struggling to re-enter as hopes for a new coronavirus stimulus deal dimmed with lawmakers unwilling to break a stalemate. Democrats and Republicans are holding their respective presidential nominating conventions this week and next.

Here’s what else traders were watching Tuesday:

  • Home Depot said sales last quarter jumped 23% as consumers stuck in their homes increased do-it-yourself projects. Earnings and sales exceeded Wall Street expectations.
  • Walmart’s earnings and revenue topped Wall Street estimates last quarter as same-store sales increased by 9.3%. E-commerce sales nearly doubled. 
  • U.S. housing starts for July totaled 1.496 million, easily topping an estimate of 1.24 million. 
  • Senate Republicans plan to introduce a narrow coronavirus relief plan that also includes $10 billion for the U.S. Postal Service, NBC News reported Monday evening.
  • Tesla shares rose 2.4%. The stock is set to split 5-for-1 later this month.

—CNBC’s Pippa Stevens contributed to this report.

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