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Wall Street's main indexes drop at open as coronavirus cases surge

The Dow Jones Industrial Average fell 150.29 points, or 0.50%, at the open to 29,800.15

Topics
Wall Street | Coronavirus | Global Markets

Reuters 

wall street
The S&P 500 opened lower by 16.60 points, or 0.46%, at 3,610.31

Wall Street’s main indexes fell on Tuesday with the S&P 500 and the Dow retreating from record closing highs hit a day earlier, following disappointing retail sales data and a spike in cases across the country.

The Nasdaq’s losses were limited by a 12 per cent jump in Tesla Inc’s shares in anticipation of a $51 billion trade by index funds adjusting their holdings when the electric-car maker will be added to the benchmark S&P 500 in December.

The Dow notched an all-time closing high on Monday, finishing about 50 points shy of 30,000 after Moderna Inc’s promising COVID-19 vaccine data boosted hopes of an economic recovery, overshadowing spiking cases across the country.

“There is conflict for the market between the near-term direction to the economy, which is troubled with the very high Covid-19 rates and the future for the market, that’s which vaccines could provide an end to the restrictions,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

New Jersey, California and Iowa imposed fresh restrictions as the pandemic reached its most perilous point yet in the United States, threatening to worsen as the colder weather sets in.

Latest data showed U.S. retail sales increased less than expected in October and could slow further due to spiraling new infections and a lack of fiscal support.

At 09:51 a.m. ET the Dow Jones Industrial Average fell 351.42 points, or 1.17 per cent, to 29,599.02, the S&P 500 lost 30.11 points, or 0.83 per cent, to 3,596.80 and the Nasdaq Composite lost 53.51 points, or 0.45 per cent, to 11,870.62.

Financials, industrials and energy stocks gave back some gains made over the last week as positive updates from U.S. vaccine trials encouraged investors to diversify into value stocks on hopes they will benefit from a pickup in the economy.

Amazon.com Inc rose 1.2 per cent after it launched an online pharmacy for delivering prescription medications in the United States. Drug retailers such as Walgreens Boots Alliance Inc tumbled 8.7 per cent, while CVS Health Corp fell 7.5 per cent on the news.

Warren Buffett’s Berkshire Hathaway Inc disclosed new stakes worth $5.7 billion in drugmakers Abbvie Inc, Bristol-Myers Squibb Co, Merck & Co and Pfizer Inc, lifting their shares between 1.4 per cent and 2.4 per cent.

Retail earnings is in focus this week as the third-quarter earnings season enters its tail end. Walmart Inc posted a bigger-than-expected increase in quarterly same-store sales. However, its shares fell 0.8 per cent after rallying 28 per cent this year.

Declining issues outnumbered advancers by 3.4-to-1 on the NYSE; on Nasdaq, a 0.3-to-1 ratio favored decliners.

The S&P 500 posted seven new 52-week highs and no new low, while the Nasdaq Composite recorded 49 new highs and three new lows.

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First Published: Tue, November 17 2020. 20:25 IST
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