New York City’s move to temporarily close schools because of the coronavirus offset optimism about Covid-19 vaccines Wednesday, weighing on US stocks two days after major indices hit records.
Equities were choppy throughout the day, but took a distinct downward path once New York Mayor Bill de Blasio announced the school closures after the city hit its target of a seven-day average coronavirus positivity rate of three percent.
The move came as US coronavirus cases tick higher, with Johns Hopkins University reporting nearly 162,000 new cases in the last day.
“This is a tug of war between vaccine excitement and nervous trepidation” about the virus, said Art Hogan, chief market strategist at National Securities.
Major US indices finished the day about one percent lower. Both the Dow and S&P 500 finished at records on Monday, but have now fallen the last two days.
“For most of the day, the market struggled to gain any traction despite a host of positive news related to a vaccine, economic data and corporate earnings,” said a note from Briefing.com.
“Presumably, this was because the market was pricing in a lot of the good news in its record-setting rally this month and needed to consolidate those gains.”
Earlier, European equities had advanced following an upbeat announcement from Pfizer and BioNTech.
The two pharma companies said a completed analysis of their experimental Covid-19 vaccine found it protected 95 percent of people against the disease — up from early data showing 90 percent efficacy, and announced they were applying for US emergency approval “within days.”
Frankfurt and Paris both finished 0.5 percent higher, while London added 0.3 percent.
Markets anticipate that broad distribution of vaccines should enable the economy to normalize in 2021, boosting especially hard-hit sectors such as airlines and entertainment stocks.
Petroleum-related stocks are also beneficiaries from an economic rebound. Crude prices rose around one percent — a day after the OPEC+ club of oil producers agreed they had to be ready to act on output cuts to prevent another slump in prices.
Bitcoin continued its rally, surging above $18,000 in Asian trading hours, before pulling back.
Among individual companies, Boeing ended 3.2 percent lower after the Federal Aviation Administration cleared the 737 MAX to resume service following a 20-month shutdown. Shares had initially soared after the announcement, which had been widely expected.
Disney dipped 0.4 percent after S&P slashed the credit rating on the entertainment company, citing the drag from coronavirus on Disney’s theme park business.
New York – Dow: DOWN 1.2 percent at 29,438.42 (close)
New York – S&P 500: DOWN 1.2 percent at 3,567.79 (close)
New York – Nasdaq: DOWN 0.8 percent at 11,801.60 (close)
London – FTSE 100: UP 0.3 percent at 6,385.24 (close)
Frankfurt – DAX 30: UP 0.5 percent at 13,201.89 (close)
Paris – CAC 40: UP 0.5 percent at 5,511.45 (close)
EURO STOXX 50: UP 0.4 percent at 3,482.17 (close)
Tokyo – Nikkei 225: DOWN 1.1 percent at 25,728.14 (close)
Hong Kong – Hang Seng: UP 0.5 percent at 26,544.29 (close)
Shanghai – Composite: UP 0.2 percent at 3,347.30 (close)
Euro/dollar: UP at $1.1853 from $1.1852 at 2200 GMT
Pound/dollar: UP at $1.3270 from $1.3199
Dollar/yen: DOWN at 103.86 yen from 104.58 yen
Euro/pound: DOWN at 89.33 pence from 89.79 pence
West Texas Intermediate: UP 0.9 percent at $41.82 per barrel
Brent North Sea crude: UP 1.4 percent at $44.34 per barrel