Stocks sold off in late trading Monday as investors fretted about a new wave of restrictions as coronavirus cases continue to climb. Major indices started the day in the green buoyed by the start of the Covid-19 vaccine rollout in the U.S. and hopes that Washington lawmakers would break a deadlock over a stimulus package. Also, a Brexit deadline came and went, with deal talks now extended.
But in afternoon trading, many of those early gains turned into losses.
Dow Jones Industrial Average fell 185 points, or 0.6%
dropped 0.4%. The tech-weighted
added 0.5% despite news of a wide-reaching outage of Google services. Shares of Alphabet (ticker: GOOGL), Google’s parent company, fell 1.3%.
Asian stocks mostly climbed, while the Stoxx Europe 600 index rose 0.4% with gains across the region, though the
slid 0.2% as the pound surged 1% against the dollar. The pound was bolstered as U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen, agreed on Sunday to go “the extra mile” and extend talks to reach a post-Brexit trade deal.
The Dow fell 0.6% to 30,046.37 last week, after a two-week winning streak, while the S&P 500 dropped 1% and the Nasdaq Composite lost 0.7%.
Part of the reason for the pullback was slow progress over stimulus talks in Washington, as economic data begin to reflect the strain of the relentless Covid-19 pandemic. Injecting fresh hope for markets, a bipartisan group of lawmakers is expected to present a two-part $908 billion stimulus proposal on Monday, Bloomberg news reported, citing a source familiar with the talks.
One part will consist of a deal worth $160 billion encompassing the sticky issues of state and local aid and liability shields for businesses, while the other is a $748 billion package covering the rest of the measures.
Treasury Secretary Steven Mnuchin and Speaker of the House Nancy Pelosi spoke by phone on Sunday to discuss stimulus and agreed to speak again on Monday, her deputy chief of staff, Drew Hammill said via Twitter.
“Given these talks have been running since July, the market may be bored to tears, but if the stimulus door slam shut before Christmas, it could still change the positive vaccine mood music,” said Stephen Innes, chief global markets strategist at Axi, in a note to clients.
The Federal Reserve will hold its final policy meeting of the year this week, a gathering that some analysts say could prove pivotal for markets. The data calendar is empty for Monday, but the week will bring updates on retail sales, among others.
Vaccine optimism continued to bolster investors, as they cheered news that the Covid-19 candidate developed by drugmaker
(PFE) and its partner BioNTech is now making its way to distribution sites across the U.S. The Pfizer vaccine is the first to be approved by the Food and Drug Administration. That is as U.S. deaths nears 300,000, according to data aggregated by Johns Hopkins University.
After the close of markets on Friday,
(MRNA) said the U.S. government has requested 100 million more doses of the company’s Covid-19 vaccine, beyond its initial 100 million purchase. The biotechnology company said the second tranche of shots will be delivered in the second quarter of 2021.
Among stocks on the move, shares of
(AZN) tumbled 7.8% after announcing one of the year’s biggest drug mergers over the weekend. The U.K. drugmaker is buying
(ALXN) for $39 billion in cash and stock. Shares of Alexion surged 29.2%.
(MCD) was up 2% after UBS upgraded the stock to Buy from Neutral and raised its price target to $240 from $230.
(NTNX) rose 1% after Oppenheimer upgraded the stock to Outperform from Perform.
(CLX) gained 0.3% after Citigroup upgraded the stock to Buy from Neutral and lifting its price target to $249 from $238.
Shares of newly public
(DASH) fell 8.6% after a pop on its trading debut and a downgrade from D.A. Davidson to Neutral from Buy.
(NVAX) shares rose 3.9% after Jefferies initiated coverage with a Buy rating and $200 price target.