Northwest Arkansas Democrat-Gazette
Stocks retreat amid worries of new virus strain
Stocks fell on Wall Street on 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 all-time 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 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.
The selling came on a busy day of trading, with plenty of forces pushing and pulling the market. Thin trading ahead of a holidayshortened 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.
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.
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.
U.K. Prime Minister Boris Johnson said Saturday that he was placing London and the southeast of England in a new level of restrictions after scientific advisers warned they detected a new variant of the coronavirus. There is no evidence that the new strain’s mutations make it more deadly, but it seems more contagious than others.
Two covid-19 vaccines have already been approved for the United States, and regulators around the world have also either approved or are considering usage of the vaccines. Hope that widespread vaccinations will nurse the economy back to some semblance of normal has been a big reason for surging prices across markets worldwide.
The worries hit stock markets hardest in Europe, where France banned U.K. trucks from entering for a period of 48 hours. Other countries around the world also halted flights from the United Kingdom.
France’s CAC 40 fell 2.4%, and Germany’s DAX lost 2.8%. The FTSE 100 in London dropped 1.7%.
All the new restrictions on movement sent travelrelated stocks on Wall Street lower. Cruise operator Carnival dropped 1.9%, Norwegian Cruise Line fell 1.6% and American Airlines lost 2.5%.
Stocks of energy producers were also weak on worries that heightened travel restrictions could mean even fewer airplane seats filled and fewer miles driven by automobiles.
Amid the market’s few gainers was Nike, which rose 4.9% after reporting stronger revenue and profit for its latest quarter than analysts expected.
The yield on the 10-year Treasury held steady at 0.93%.