U.S. stocks fell on Wednesday as the market’s recent rally to new records took a breather.
The Dow Jones Industrial Average last traded 130 points lower in the volatile session, after rising as much as 147 points at its session high. The S&P 500 dipped 0.4%, while the tech-heavy Nasdaq Composite fell 0.3%.
Investors weighed positive developments on the coronavirus vaccine front against the worsening pandemic that brought on new restrictions.
Pfizer released the final data on its vaccine candidate with BioNTech, which turned out even better than the initial data. The companies said the vaccine was 95% effective in preventing Covid-19 and fended off severe infection in the trial, adding that it plans to submit an application for emergency use authorization “within days.”
“The vaccine announcement has moved the conversation about a return to normal from ‘if’ to ‘when,'” said Bill Callahan, investment strategist at Schroders. “What is most important is that the vaccine announcement removed some of the long term uncertainty, which had kept investors cautious.”
Still, the U.S. is grappling with worsening Covid-19 infections ahead of a likely tough winter. The country is recording roughly 157,000 new coronavirus cases per day, on average, as of Tuesday, according to a CNBC analysis of Johns Hopkins data. That’s another new record and nearly 30% higher than infection levels a week ago.
New York City’s schools will move to remote learning only as the city tries to tamp down a growing number of coronavirus cases, Mayor Bill de Blasio announced in a Tweet on Wednesday.
Some stay-at-home stocks turned higher after the announcement of the shuttering of the nation’s largest school system. Video conferencing company Zoom Video rallied nearly 3%, while Peloton also gained 1.6%.
Meanwhile, shares of major technology companies led the broader market lower. Amazon, Microsoft, Alphabet and Facebook all fell at least 0.5%.
The major averages were on pace for their second straight day of losses. The Dow and the S&P 500 both hit new record highs on Monday following positive vaccine news.
Dow-member Boeing jumped as much as 4% as the Federal Aviation Administration lifted its ban on Boeing’s 737 Max after a 20-month grounding following two deadly crashes. The stock last traded near the flat line.
Meanwhile, Target shares rose about 2% after the retailer’s third quarter earnings topped estimates because of booming digital sales.
Stocks are still having a strong month on the back of positive developments around Covid-19 vaccines. The Dow is up more than 12% and the S&P 500 is up more than 10% in November. The Nasdaq Composite is up more than 9%, lagging as investors ditch technology shares for cyclical plays.
“The cyclical/value rotation continues as that cohort enjoys mild outperformance,” Adam Crisafulli, the founder of Vital Knowledge, said in a note on Wednesday. “The retail earnings in the last 36 hours have all revealed favorable consumer tailwinds, but not all those stocks saw gains.”
Lowe’s shares dropped 6% after the home improvement retailer reported third-quarter earnings and a profit outlook slightly short of estimates.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
