May 11, 2020 / 8:04 PM / 3 months ago

US STOCKS-S&P 500 closes barely higher as investors balance pandemic with recovery

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By Stephen Culp

NEW YORK, May 11 (Reuters) - The S&P 500 closed slightly higher on Monday as investors looked beyond new spikes in coronavirus infections to focus on expectations that an economy crippled by mandated shutdowns will soon be re-opened for business.

Technology and healthcare shares provided the biggest lift to all three major U.S. stock indexes and led the tech-heavy Nasdaq to its sixth consecutive advance.

The S&P 500 and Dow Jones Industrial Average remain within 20% of all-time highs reached in February, and the tech-heavy Nasdaq is within 10% of its closing record.

Indeed, despite bleak recent economic data, including Friday's 20.2 million drop in U.S. payrolls, Wall Street has gained in recent weeks as investors look beyond pandemic to recovery.

"Investors have been buying equities given the realistic expectation that massive fiscal and monetary stimulus will reignite economic and profit growth," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "There is still a fair amount of optimism in the markets, but this could be quelled if coronavirus cases re-emerge."

But a surge of new coronavirus infections in Germany and South Korea suggested early efforts to lift restrictions could be premature, even as businesses around the world, shuttered by social distancing restrictions, begin re-opening their doors.

"There's really no playbook for a health crisis like the world is now experiencing," Carter added. "With no playbook, there's much less certainty and markets are more likely to vacillate."

Unofficially, the Dow Jones Industrial Average fell 0.45% to end at 24,221.99 points, while the S&P 500 gained 0.01%, to 2,930.19.

The Nasdaq Composite climbed 0.78% to 9,192.34.

First-quarter earnings season is nearing the final stretch, with 440 of the companies in the S&P 500 having reported. Of those, 67.5% have beaten Wall Street estimates, according to Refinitiv data.

In aggregate, S&P 500 earnings are seen to have dropped by 12.1% in the first quarter, compared with a year ago.

Drug distributor Cardinal Health Inc jumped as the pandemic boosted third-quarter sales.

Chesapeake Energy Corp slid after it said bankruptcy is among the options under consideration as the shale driller copes with plummeting oil and gas prices.

Marriott shares fell after the hotel operator missed first-quarter profit margins by a wide margin as bookings plunged.

Shares of Under Armour Inc plunged after the athletic wear company forecast a 50% to 60% drop in the second quarter as many of its stores remain shuttered.

Packaged food company General Mills rose after saying it expects to surpass its fiscal 2020 sales expectations as consumers stock their pantries amid lockdowns. (Reporting by Stephen Culp; Editing by Cynthia Osterman)

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