Stock rally fizzles out as coronavirus fears return

New York(CNN Business) Friday morning's US stock market rally didn't last very long, and the Dow and S&P 500 finished in the red.

Stocks made a U-turn and headed lower around midday, as worries about growing Covid-19 infections outweighed optimism over US-China trade relations.

Parts of the country have been dealing with thousands of new infections, which is spooking businesses, economists and investors.

Movie theater chain AMC (AMC), for example, said it would require customers to wear masks when it reopens next month.

On Friday, Florida's Department of Health reported an additional 3,822 cases -- the highest number of reported cases in a single day -- bringing the state total to 89,748.

Stocks closed mostly lower. The Dow (INDU) ended down 209 points, a drop of 0.8%. The index was up more than 370 points at its high point.

The S&P 500 (SPX), which is the broadest measure of Wall Street, fell 0.6%, while the tech-heavy Nasdaq Composite (COMP) ended just barely in positive territory. It was its sixth day ending in the green.

Despite Friday's losses, all three indexes recorded gains for the week.

The economy ground to a halt during the pandemic lockdown in April. The country is in a recession, even though some economic data is beginning to improve. A second round of restrictions could hurt this progress.

Stocks initially rallied at the opening bell on Friday, with analysts saying US-China trade relations were behind those initial gains. Beijing is planning to buy more agricultural goods from the United States, in line with the phase one trade deal the two countries agreed to in January, according to a Bloomberg report.

That said, analysts predicted trade optimism wouldn't be a focus of the market for too long, provided the US-China phase one deal didn't suddenly fall apart.

This theory certainly seemed to prove true in the second half of the trading day.

Other asset classes also reacted to the dour Covid news. Safe haven US Treasury bonds gave back their losses and were little changed, with the 10-year bond yield just below 0.7%. Bond yields and prices move in opposite directions.

The US dollar, which was weaker against its rivals in the morning, gained 0.2% in the ICE US Dollar Index.

Oil futures settled in the green but gave back some of their earlier gains, with US oil up 2.3% at $39.75 a barrel. Brent, the global oil benchmark, settled up 1.6% at $42.19 a barrel.

Most European and Asian stock exchanges finished the day in the green.