Stocks Wobble Between Small Gains and Losses
By Will Horner and Caitlin McCabe
U.S. stocks slipped Wednesday, pulling back from Tuesday's
record highs as rising coronavirus cases and a murky outlook for a
coronavirus stimulus weighed on investor sentiment.
All three major U.S. indexes tumbled after the opening bell,
with the Dow Jones Industrial Average falling more 200 points,
before paring losses.
The blue-chip index was recently off about 10 points, or 0.1%.
The S&P 500 was teetering between small gains and losses, a day
after the benchmark set its 27th closing record of the year. The
Nasdaq Composite, meanwhile, dropped 0.2% after also setting a
The market has been propelled higher in recent weeks by optimism
that Covid-19 vaccines will help accelerate the economic rebound.
That has led to a jump in stocks that are sensitive to economic
growth, including energy and banks and recently helped the Dow
vault above 30000 for the first time.
On Tuesday, however, much of that momentum moderated, even after
the U.K. granted emergency-use authorization for a Covid-19 vaccine
developed by Pfizer and BioNTech. Public health experts expect that
a similar authorization in the U.S. could come later this
"That's exciting but that was also expected," Chris
Konstantinos, chief investment strategist at RiverFront Investment
Group, said of the U.K.'s green light of the vaccine. "We're in a
bit of an information vacuum. We're through earning season and now
the market is kind of waiting until the end of the year and
watching vaccine news and stimulus news."
Still, investors say they are optimistic about the equity
markets in the months ahead as they anticipate a strong economic
recovery once large swaths of the population are vaccinated in the
U.S. next year. The Federal Reserve's commitment to providing
sustained stimulus has also extended investors' risk appetite.
"Why would you be a seller of stocks when you know that policy
support, both fiscal and monetary, is there and probably will be
there going forward?" said Derek Halpenny, head of research for
global markets in the European region at MUFG Bank.
He added that he expects stocks to continue rallying in coming
weeks, despite valuations that appear to be stretched.
U.S. lawmakers this week reignited talks for coronavirus relief
packages, with House Speaker Nancy Pelosi and Treasury Secretary
Steven Mnuchin discussing measures by phone for the first time
since the election.
But investors remain skeptical about the prospects for fresh
stimulus spending in the weeks before President-elect Joe Biden is
Among the biggest winners in Tuesday's market were shares of
energy companies, with Apache rising 8.6% and Occidental Petroleum
jumping 7.7%. Pfizer rose 3.2% after its U.K. government
Meanwhile, Salesforce.com tumbled 7%. The cloud-computing
company on Tuesday confirmed that it had agreed to buy Slack
Technologies for $27.7 billion.
And Tesla tumbled 3.1%. On Monday, S&P Dow Jones Indices
said it would add Tesla's full weight to the S&P 500 all at
once later this month.
Later today, investors will be parsing the Federal Reserve's
beige book report, due at 2 p.m. ET, which will provide the latest
collection of business anecdotes across Fed districts. That will
offer insights into how companies view the economy's prospects.
The ADP National Employment Report on Wednesday showed that job
creation in the private sector slowed last month. About 307,000 new
nonfarm jobs were created, marking a drop from October and less
than economists had been forecasting.
Federal Reserve Chairman Jerome Powell and Mr. Mnuchin are set
to testify before a house committee. Lawmakers on Tuesday pressed
Mr. Mnuchin over his decision not to renew a suite of emergency
Federal Reserve lending programs. The Fed has said it would prefer
the lending programs remain in place until the risks posed to the
economy by the pandemic has subsided.
In bond markets, the yield on the 10-year Treasurys jumped to
0.960%, from 0.933% on Tuesday.
Overseas, the Stoxx Europe 600 edged down 0.1%. Conflicting
reports about the status of the talks between the European Union
and the U.K. on a post-Brexit trade deal led to choppy trading in
In Asia, the major stock indexes ended trading on a muted note.
Japan's Nikkei 225 closed almost flat, while the Shanghai Composite
Index and Hong Kong's Hang Seng Index slid roughly 0.1%.
Write to Will Horner at William.Horner@wsj.com and Caitlin
McCabe at email@example.com
(END) Dow Jones Newswires
December 02, 2020 12:05 ET (17:05 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.