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NEW YORK: US stocks closed sharply lower after a sell-off late in the session on Wednesday as investors weighed rising COVID-19 infections and mounting closings against encouraging vaccine developments.
While the top three U.S. stock indices swung for much of the day, with economically sensitive cyclicals and small caps leading the way, they closed sharply in the red.
“It’s a confusing market because portfolio managers don’t know what time frame to focus on,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “It is this trade-off between the short term during the six to nine months of continuous virus spread and the period after that when everyone is vaccinated and the virus is eradicated.”
“There are many problems, but the decided bias has been towards value and cycles,” Ghriskey added.
Pfizer Inc and its German partner BioNTech revealed a 95% success rate at the conclusion of their COVID-19 vaccine trial, just days after Moderna Inc announced a similar success rate in preliminary data for its vaccine candidate.
Market participants have greeted vaccine developments with cautious optimism, but that is being tested as new global infections skyrocket to record highs, and setbacks from reopens and new lockdowns continue to increase.
The Dow Jones Industrial Average fell 344.93 points, or 1.16%, to 29,438.42, the S&P 500 lost 41.74 points, or 1.16%, to 3,567.79 and the Nasdaq Composite fell 97.74 points , or 0.82%, at 11,801.60.
The top 11 sectors of the S&P 500 closed in negative territory, with energy stocks taking the biggest loss.
The third quarter reporting season has reached the final entry, with 468 of the S&P 500 companies reporting. Of them, 84.4% have surprised the consensus on the upside, according to Refinitiv.
Initially, Boeing Co provided the biggest boost to the Dow after the Federal Aviation Commission gave the aircraft maker’s 737 MAX jet the green light to resume flights, but its actions later reversed course, losing 3.2%. .
Target Corp comfortably beat quarterly sales and earnings estimates, driven by a 155% increase in comparable digital sales. The retailer’s shares were up 2.3%.
Lowe’s Companies Inc fell 8.2% after the home improvement retailer forecast lower-than-expected quarterly vacation earnings as it strengthens its online business and hands out bonuses to employees to ease pandemic-related difficulties. .
Issues in decline outnumbered those advancing on the NYSE by 1.52 to 1; on the Nasdaq, a 1.57-to-1 ratio favored declines.
The S&P 500 posted 30 new 52-week highs and no new lows; the Nasdaq Composite recorded 142 new highs and nine new lows.
The volume of US exchanges was 11.42 billion shares, compared to the average of 10.44 billion for the last 20 trading days.
– Reuters
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