US stocks on Friday closed lower as investors wrestled with fiscal stimulus developments, concerns over a lengthy rollout of vaccines, and a growing number of state-level shutdowns to combat the spiraling COVID-19 pandemic.
Stay-at-home plays such as Zoom Video Communications Inc and Netflix Inc, which have outperformed throughout the health crisis, helped curb the NASDAQ’s loss.
The Dow Jones Industrial Average fell 219.75 points, or 0.75 percent, to 29,263.48, the S&P 500 lost 24.33 points, or 0.68 percent, to 3,557.54 and the NASDAQ Composite dropped 49.74 points, or 0.42 percent, to 11,854.97.
Throughout the week, the ebb and flow of vaccine news and spiking infections had investors oscillating between economically sensitive cyclical stocks and pandemic-resistant market leaders.
The S&P 500 and the Dow posted marginal losses for the week at 0.73 percent and 0.77 percent respectively, while the tech-laden NASDAQ settled 0.22 percent higher from last Friday’s close.
“Markets are still stuck in a push-and-pull between the dramatic rise of new COVID cases versus apparent progress on vaccines,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York. “This is likely to continue until we have an approved and distributed vaccine.”
US Secretary of the Treasury Steven Mnuchin late on Thursday announced that he would allow key pandemic relief lending programs at the US Federal Reserve to expire at the end of the year, saying that the US$455 billion allocated last spring under the Coronavirus Aid, Relief, and Economic Security Act should be returned to the US Congress to be reallocated as grants for small companies.
The decision to pull the plug on lending programs deemed essential by the central bank comes at a time of spiraling new COVID-19 infections and a fresh wave of layoffs, and was called “disappointing” by Chicago Fed president Charles Evans.
“This dust-up between the Fed and the [US Department of the] Treasury could have serious implications, as markets want to see the two institutions working well together,” Carter said. “The timing of this dust-up is unfortunate, as the risk of COVID is still very much with us.”
Record infection numbers in the US have caused COVID-19 hospitalizations to soar 50 percent and have prompted a new round of school and businesses closures, curfews and social distancing restrictions, hobbling economic recovery from the deepest recession since the Great Depression.
In the latest development in the race to develop a vaccine, Pfizer Inc has applied to the US Food and Drug Administration for emergency use authorization of its COVID-19 vaccine, the first application of its kind in the battle against the disease. The drugmaker’s shares rose 1.4 percent, and provided the biggest lift to the S&P 500.
Of the 11 major sectors in the S&P 500, only utilities eked out a gain by the closing bell. Technology and industrials suffered the largest percentage losses on the day.
Declining issues outnumbered advancing ones on the NYSE by a 1.06-to-1 ratio; on the NASDAQ, a 1.12-to-1 ratio favored advancers.
The S&P 500 posted 17 new 52-week highs and no new lows; the NASDAQ Composite recorded 122 new highs and 10 new lows.
Volume on US exchanges was 10.69 billion shares, compared with the 10.70 billion average over the past 20 trading days.
Additional reporting by staff writer
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