Wall Street Closing Report: Dow falls more than 300 points for a second day of losses as rally to records pauses.
Yun Li, Maggie Fitzgerald
U.S. stocks fell on Wednesday as the market’s recent rally to new records took a breather.
The Dow Jones Industrial Average last traded 305 points lower in a volatile session, after rising as much as 147 points at its session high. The S&P 500 dipped 0.9%, while the tech-heavy Nasdaq Composite fell 0.7%.
The worsening pandemic that brought on new restrictions overshadowed positive developments on the coronavirus vaccine front.
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.
The major averages 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.
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 1.9%.
Meanwhile, shares of major technology companies led the broader market lower. Amazon, Microsoft, Alphabet and Facebook all fell at least 0.5%.
The major averages were on pace for their second straight day of losses. The Dow and the S&P 500 both hit new record highs on Monday following positive vaccine news.
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% as the Federal Aviation Administration lifted its ban on Boeing’s 737 Max after a 20-month grounding following two deadly crashes. The stock last traded near the flat line.
Meanwhile, Target shares rose about 2% after the retailer’s third quarter earnings topped estimates because of booming digital sales.
Stocks are still having a strong month on the back of positive developments around Covid-19 vaccines. The Dow is up more than 12% and the S&P 500 is up more than 10% in November. The Nasdaq Composite is up more than 9%, 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 6% after the home improvement retailer reported third-quarter earnings and a profit outlook slightly short of estimates.
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