Wall Street drops after strong rally

Investors took profits Tuesday, ending the S&P 500’s and Nasdaq’s five-day winning streak. A further rise in coronavirus cases and the expansion of New York’s quarantine helped drive down economically sensitive stocks like banks and industrials.

The Dow and S&P 500 fell more than 1%. The Nasdaq shed nine-tenths percent.

DataTrek Research co-founder, Nick Colas:

“It looks like the market today is digesting some of the recent gains. Very natural. I think we’re in the middle of a holding period for stocks that will last until we get corporate earnings.”

While the coronavirus caseload hurt investor sentiment Tuesday, others were attracted to shares of Novavax, which jumped 32%. The U.S. government awarded the drugmaker $1.6 billion to cover testing, commercialization and production of a potential coronavirus vaccine.

Providing the biggest ballast to the S&P was Walmart’s nearly 7% rise. The tech news website Recode reports the retailer is close to launching a membership program, Walmart+, that would compete head-on with Amazon’s Prime service. Amazon shares dropped nearly 2%.

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