By Joe Wallace and Alexander Osipovich
The S&P 500 fell Monday as a fast-spreading strain of
coronavirus emerging from England prompted fresh travel
restrictions, dealing a setback for the global economic
recovery.
The broad-based index fell 14.49 points, or 0.4%, to 3694.92.
The Dow Jones Industrial Average ticked up 37.40 points, or 0.1%,
to 30216.45, having bounced back from a midmorning loss of more
than 420 points.
The technology-heavy Nasdaq Composite slipped 13.12 points, or
0.1%, to 12742.52. All three indexes were trading at records last
week.
Overseas, European shares tumbled after countries across the
Continent and beyond barred travelers from Britain in an effort to
keep out an infectious variant of coronavirus that is spreading
rapidly in England. The pan-continental Stoxx Europe 600 slumped
2.3%.
"People are bracing themselves for a challenging start to 2021,"
said Brian O'Reilly, head of market strategy for Mediolanum
International Funds.
Oil prices also retreated amid expectations that fresh
restrictions on European travel and transport will pinch fuel
demand heading into 2021. Futures on Brent crude, the international
energy benchmark, lost 2.6% to settle at $50.91 a barrel, their
largest one-day drop in six weeks.
Still, some investors took advantage of Monday's declines to buy
stocks, lifting the market off its session lows.
"To me, it's a buying opportunity," said Philip Blancato,
president of Ladenburg Thalmann Asset Management. In recent weeks,
his firm has bought bank and industrial stocks in expectation that
the economy will stabilize early next year, boosted by progress in
vaccinations.
"You could have as many as 20 million Americans inoculated by
the first week of January. As those numbers increase, it's going to
have a profound effect," Mr. Blancato added.
A big support for the market was the prospect of a fiscal relief
package that will ease pressure on the American economy. Congress
was set to vote Monday on the roughly $900 billion aid package,
after Republicans and Democrats reached a deal late Sunday. The
legislation -- which includes direct checks to many Americans,
additional unemployment benefits and relief for small businesses --
could help support consumption in the coming months.
"It is more an antidepressant than a stimulant," said Paul
Donovan, chief economist at UBS Global Wealth Management. "The
uncertainty here is to what extent are the $600 checks spent, and
to what extent does an extra $300 a week unemployment benefit
mitigate fear of unemployment for those who have jobs."
Nine of the S&P 500's 11 sectors closed the day in negative
territory. The only sectors to post gains were technology and
financials, which got a boost after the Federal Reserve said late
Friday that it would allow banks to resume share buybacks. Goldman
Sachs shares rallied $14.85, or 6.1%, to $256.98, making it the
best performer in the Dow.
The blue-chip index also got a boost from Nike. Shares of the
sportswear giant jumped $6.74, or 4.9%, to $144.02 after it said
late Friday that digital revenue for its flagship brand rose 84% in
the three months through November.
Oil producers, airlines and cruise-line operators were all hit
by the resurgence of coronavirus fears. Exxon Mobil shed 78 cents,
or 1.8%, to $41.95. American Airlines Group dropped 41 cents, or
2.5%, to $16.10. Carnival slid 40 cents, or 1.9%, to $21.06.
Tesla shares declined $45.14, or 6.5%, to $649.86 on their first
day in the S&P 500 as furious demand from index funds dried up
after the stock joined the index.
In European markets, London-listed shares of Royal Dutch Shell
fell 5% after the oil major said it would write down the value of
its assets by up to $4.5 billion.
The U.K.'s benchmark FTSE 100 slid 1.7%. Officials over the
weekend tightened lockdown measures on London and surrounding areas
in an effort to contain the new strain of virus, which appeared to
be spreading 70% faster than earlier variants, according to the
British government.
Adding to investors' concerns about U.K. markets, negotiators
missed a Sunday deadline for reaching a Brexit agreement, raising
the prospect of a disruptive U.K. exit from the European Union at
the end of the year. The pound dropped 0.7% against the dollar.
Mutations in viruses are common, and it remains unclear whether
the new strain of coronavirus is more likely to be fatal or cause
serious illness. The new variant shouldn't stop the world economy
from rebounding in 2021 as long as vaccines are able to combat it,
investors said.
"As long as the vaccines are rolled out on schedule then by the
second quarter of next year we should see activity moving back to
normality," said Nicholas Brooks, head of economic and investment
research at Intermediate Capital Group.
In bond markets, the 10-year Treasury yield inched down to
0.941% from 0.947% Friday. Yields fall as bond prices rise.
Asian markets were mixed. China's Shanghai Composite Index
gained 0.8%, while Hong Kong's Hang Seng fell 0.7%. In Japan, the
Nikkei 225 slipped 0.2%.
Write to Joe Wallace at Joe.Wallace@wsj.com and Alexander
Osipovich at alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
December 21, 2020 16:51 ET (21:51 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Grafico Indice FTSE 100
Da Mar 2024 a Apr 2024
Grafico Indice FTSE 100
Da Apr 2023 a Apr 2024