S&P 500 closes lower in volatile session after new Covid strain causes U.K. to lock down
The S&P 500 fell slightly in volatile trading on Monday to start the holiday week as enthusiasm over a coronavirus stimulus deal was overwhelmed by worries over a viral new Covid strain in the U.K.
The broad equity index dipped 0.4%, or 14.49 points, to 3,694.92 after falling nearly 2% at its session low.
The Nasdaq Composite fell 0.1%, or 13.12 points, to 12,742.52.
The Dow Jones Industrial Average erased a 400-point loss to eke out a small gain as strength in Nike and bank shares supported the blue-chip benchmark. The 30-stock Dow rose 0.1%, or 37.40 points, to 30,216.45.
Nike popped nearly 5% to hit a record high on the back of strong earnings. Bank stocks jumped in unison with JPMorgan and Goldman up 3.8% and 6.1%, respectively, after the Federal Reserve announced it will allow the industry to resume share buybacks in the first quarter of 2021.
Travel-related stocks initially fell sharply on news of an infectious new coronavirus strain in the U.K., which triggered more severe lockdowns and travel restrictions across Europe. However, some believe the concerns over the new virus variant could be overblown.
Treasury Secretary Steven Mnuchin told CNBC’s “Squawk Box” that the stimulus money will go out as soon as next week. Lawmakers will vote on the relief and funding bill on Monday.
Now with a stimulus package agreed upon, investors may also be seeking to lock in profits after an unexpected banner year. With less than two trading weeks left in 2020, the S&P 500 is up 14.4% for the year, while the 30-stock Dow has risen 5.9%. The Nasdaq Composite has rallied 42.0% this year as investors favored high-growth technology companies.
The major averages hit record highs recently amid optimism toward fresh coronavirus stimulus as well as the vaccine rollout. Moderna is shipping its first batch of vaccine doses after receiving approval for emergency use from the U.S. Food and Drug Administration. Meanwhile, the vaccine by Pfizer and BioNTech is being distributed to front-line health-care workers around the country.
Monday was also the first trading day where Tesla was a member of the S&P 500. The electric vehicle stock shed 6.5%, with part of that loss coming after Reuters reported that Apple was targeting 2024 as a date to introduce its own passenger vehicle.
Reference: CNBC
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