Rally fades on Wall Street, pulling indexes downward

Stocks closed mostly higher on Wednesday, helped by big technology stocks, but news of tighter restrictions in New York State helped dent an earlier rally.

The S&P 500 closed up 27.13 points, or 0.8 percent, to 3,572.66. The benchmark index is now just 8 points below the record high it set in September. The technologyheavy Nasdaq composite rose 232.57 points, or 2 percent, to 11,786.43.

The Dow Jones Industrial Average fell 23.29 points, or 0.1 percent, to 29,397.63. The index was dragged lower in part by American Express and Walt Disney, two stocks that shot up this week after news of a potentially successful vaccine sent travel, entertainment and tourism companies surging. The Dow declined shortly after news crossed that New York would put restrictions on bars, restaurants and gyms as COVID-19 infections rose in the state.

Enthusiasm about the economy’s possible return to normal has vaulted stocks higher this week following encouraging, but incomplete data on a potential vaccine for COVID-19. That pushed investors to shift dollars out of the old winners of the stay-at-home, virus-wracked economy and into beaten-down stocks that have a brighter future if people feel comfortable again going outside their homes.

Big Tech stocks had borne the brunt of this week’s dramatic reordering, but they clawed back some of those earlier losses. Microsoft rose 2.6 percent, erasing much of its loss for the week, for example.

Amazon gained 3.4 percent to pare its weekly loss.

Elsewhere in the market, some of the massive rotation that swept through early this week also eased off the accelerator. The S&P 500 was nearly evenly split between stocks rising and falling, while energy and bank stocks gave back a bit of their huge gains from Monday and Tuesday.

Tourism and entertainment stocks fell sharply, following the drops in American Express and Walt Disney. Delta Air Lines fell 5.5 percent and Wynn Resorts dropped 5.1 percent.

While several significant risks remain for Wall Street broadly, the optimistic case that investors are embracing is that one or more coronavirus vaccines could help corral the virus by the second half of next year, encouraging people to return to life as it was before the pandemic.

All that economic activity would come on top of the tremendous aid that the Federal Reserve and other central banks around the world are pumping into the economy through very low interest rates and massive purchases of bonds.