Stocks fall on more worries about virus’ spread
Stocks fell on Wall Street Monday, giving back some of their recent gains, as a new, potentially more infectious strain of the coronavirus in the United Kingdom raised worries that the global economy could be in for even more punishment.
The S& P 500 lost 0.4%, it’s second straight decline after climbing to an alltime high on Thursday. The benchmark index pared its loss as the day progressed, however, recovering from an earlier 2% drop. Treasury yields mostly fell, a sign that investors are worried about the economy. Crude oil prices fell on worries about disappearing demand.
The selling came on a busy day of trading, with plenty of forces pushing and pulling the market.
Thin trading ahead of a holiday- shortened week may also be exacerbating moves, analysts said.
News of a new and potentially more infectious strain of the coronavirus has countries around the world restricting travel from the United Kingdom. That has traders worried about the possible economic consequences should it spread to other countries or prove resistant to vaccines being distributed now.
“The market is focused on the restrictions in place in the U.K., with more and more of the U. K. being locked down, and whether or not this is going to happen in the U.S.,” said Quincy Krosby, chief market strategist at Prudential Financial.
The S& P 500 fell 14.49 points to 3,694.92. The Dow Jones Industrial Average rose 37.40 points, or 0.1%, to 30,216.45 after erasing an earlier 423 point loss. The Nasdaq composite slipped 13.12 points, or 0.1%, to 12,742.52. The Russell 2000 small-cap index gained 0.34 points, or less than 0.1%, to 1,970.33.
Encouraging news out of Washington helped keep the selling in check. Congress finally appeared set to act on a $900 billion relief effort for the economy. House and Senate leaders were planning to vote Monday on the deal, which would include $600 in cash payments sent to most Americans, extra benefits for laid- off workers and other financial support.
Economists and investors have been clamoring for such aid for months, and a recent upswing in momentum for talks had stock prices rising in anticipation of a deal. Analysts said some traders may have been selling to lock in profits, with the compromise all but assured and prices close to the highest they’ve ever been. Even after Monday’s drop, the S& P 500 is back only to where it was earlier this month.
Across the Atlantic, negotiators blew past a Sunday deadline set for talks on trade terms for the United Kingdom’s exit from the European Union. Investors have been fixed on the progress of those talks because a Brexit with no deal could cause massive disruptions for businesses on New Year’s Day.
Monday is also the first day of trading for Tesla since joining the S& P 500 index. The electric-vehicle maker surged so much this year, nearly 731% as of Friday evening, that some critics say its price doesn’t make sense. But its inclusion in the benchmark index triggered $ 90.3 billion in trades, as the company instantly became the sixth- biggest in the S& P 500. Tesla slumped 6.5% Monday.