U.S. stocks fell for a second straight day on Wednesday as the market’s recent rally to new records took a pause.
The Dow Jones Industrial Average dropped 344.93 points, or 1.2%, to 29,438.42 in a volatile session, after rising as much as 147 points at its session high. The S&P 500 slid 1.2%, or 41.74 points, to 3,567.79, while the tech-heavy Nasdaq Composite fell 0.8%, or 97.74 points, to 11,801.60. The major averages finished the day near their session lows.
The worsening pandemic that brought on new restrictions overshadowed positive developments on the coronavirus vaccine front.
Stocks turned sharply lower after Mayor Bill de Blasio announced New York City’s public schools will move to remote learning only as the city tries to tamp down a growing number of coronavirus cases.
The U.S. is grappling with rising Covid-19 infections ahead of a likely tough winter. The country is recording roughly 157,000 new coronavirus cases per day, on average, as of Tuesday, according to a CNBC analysis of Johns Hopkins data. That’s another new record and nearly 30% higher than infection levels a week ago.
Some stay-at-home stocks jumped after the announcement of the shuttering of the nation’s largest school system. Video conferencing company Zoom Video rallied more than 3%, while Peloton gained nearly 2%.
Meanwhile, shares of major technology companies led the broader market lower. Apple Microsoft, Alphabet and Facebook all fell at least 1%.
The market’s two-day decline came after the Dow and the S&P 500 both hit new record highs on Monday following promising vaccine news.
Investors digested more positive developments on Wednesday. Pfizer released the final data on its vaccine candidate with BioNTech, which turned out even better than the initial data. The companies said the vaccine was 95% effective in preventing Covid-19 and fended off severe infection in the trial, adding that they plan to submit an application for emergency use authorization “within days.”
“The vaccine announcement has moved the conversation about a return to normal from ‘if’ to ‘when,’” said Bill Callahan, investment strategist at Schroders. “What is most important is that the vaccine announcement removed some of the long term uncertainty, which had kept investors cautious.”
Dow-member Boeing jumped as much as 4% at one point as the Federal Aviation Administration lifted its ban on Boeing’s 737 Max after a 20-month grounding following two deadly crashes. The stock finished the day more than 3% lower, however.
Meanwhile, Target shares rose about 2% after the retailer’s third quarter earnings topped estimates because of booming digital sales.
The major benchmarks’ back-to-back pullback pared their strong gains for this month. The Dow is up about 11% through Wednesday and the S&P 500 is up more than 9% in November. The Nasdaq Composite is up more than 8%, lagging as investors ditch technology shares for cyclical plays.
“The cyclical/value rotation continues as that cohort enjoys mild outperformance,” Adam Crisafulli, the founder of Vital Knowledge, said in a note on Wednesday. “The retail earnings in the last 36 hours have all revealed favorable consumer tailwinds, but not all those stocks saw gains.
Lowe’s shares dropped more than 8% after the home improvement retailer reported third-quarter earnings and a profit outlook slightly short of estimates.
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Sources from: CNBC
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