Markets

Dow falls more than 300 points as Walgreens slides, but tech leads Nasdaq to record high

VIDEO2:1802:18
Dow drops 500 points as investors fear surging coronavirus infections—Three experts break down what to watch

The Dow Jones Industrial Average fell sharply on Thursday, erasing its gains for the week, amid renewed concerns over the coronavirus and its impact on the economy. 

The 30-stock average dropped 361.19 points, or 1.4%, to 25,706.09. Thursday's decline put the Dow 0.5% lower week to date. The S&P 500 slid 0.6% to 3,152.05. The Nasdaq Composite posted a record, rising 0.5% to 10,547.75.

Walgreens was the biggest laggard in the Dow, dropping 7.7% on weaker-than-expected earnings for the previous quarter. Walgreens also suspended a share repurchase program. Boeing fell more than 3%. 

Shares of companies that would benefit from the economy reopening struggled. United Airlines, Delta and American all fell more than 5%. Carnival Corp dropped 4.8% and Royal Caribbean slid 5.9%. Kohl's declined by 7.3%.

Stocks hit their lows of the day after Florida reported a record in coronavirus-related hospitalizations. The state also reported a record spike in Covid deaths. California's average daily case increase hit an all-time high as well. Equities recovered slightly, however, after Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said Moderna's coronavirus vaccine candidate will likely enter phase 3 trials by the end of July.

"There's less reason for optimism now than there was in April," said Jason Thomas, chief economist at AssetMark. "In April, we had a view on how long it would take to get a vaccine, and there was the possibility that we could open the country in stages and see a sustainable recovery."

"We're still looking at a vaccine sometime early next year, but it's become clear that it'll be very difficult to open without causing a renewed surge" in coronavirus cases, Thomas added.

Adding to the bearish sentiment Thursday was a Supreme Court ruling saying the Manhattan district attorney can look at President Donald Trump's tax records as part of an investigation. 

"The Supreme Court ruling jolted the markets as it might deal a blow to Trump's chance for re-election," said Art Cashin, director of NYSE floor operations at UBS. "It did not bring in as much selling as it did spook the bulls so the market drifted down in a relative vacuum."

But gains in some of the biggest tech-related names capped the losses Thursday. Amazon rose 3.3% to an all-time high. Alphabet, Microsoft and Apple were up at least 0.4% each. 

These stocks have outperformed this week as investors grow concerned the recent global coronavirus spikes could prolong the current economic downturn and force people to stay home for longer.

"A lot of these names are benefiting from the at-home play," said Douglas Busch, founder of ChartSmarter. Busch noted that, from a technical perspective, he'd like to see consolidation in some of the major tech stocks but thinks they have further upside moving forward.

More than 3 million coronavirus cases have been confirmed in the U.S. alone, according to Johns Hopkins University. Globally, over 12 million cases have been confirmed.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

—CNBC's Michael Bloom and Patti Domm contributed to this report.