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S&P 500, Dow pull back from record highs as shutdown worries loom

CoronavirusNov 17, 2020 02:15PM ET
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© Reuters. The New York Stock Exchange is pictured

By Stephen Culp

(Reuters) - The S&P 500 and the Dow retreated from record closing highs on Tuesday as surging cases of COVID-19 and the growing threat of a fresh round of economic lockdowns and weak retail sales data dampened the euphoria caused by potential vaccine breakthroughs.

The broad sell-off was a reversal of Monday's rally, in which the blue-chip Dow reached its first record closing high since before the pandemic.

The Nasdaq was essentially flat, its losses capped by surging Tesla Inc (O:TSLA) shares.

"We're seeing profit taking after some substantial gains, and we had mixed macro news," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "The market is pulling back, but we're off the lows of the day."

"There's nothing to suggest we've hit a peak of this 'vaccine rally.'"

Monday's rally was prompted by Moderna Inc's (O:MRNA) announcement that its COVID-19 vaccine candidate appears to be 94.5% effective in preventing infection.

But a recent surge in new coronavirus cases across the United States have led several governors to enact new restrictions to prevent the disease from spiraling out of control.

The retail sales report released by the Commerce Department showed spending decelerating as the holiday shopping season approaches amid a lack of forthcoming fiscal relief from Washington.

"The retail sales data was disappointing and that's an alarming sign, in that we're not very far away from the holiday spending season," Cardillo added. "The pandemic is keeping people from opening up their wallets in a big way."

The Dow Jones Industrial Average (DJI) fell 171.75 points, or 0.57%, to 29,778.69, the S&P 500 (SPX) lost 12.45 points, or 0.34%, to 3,614.46 and the Nasdaq Composite (IXIC) dropped 0.67 points, or 0.01%, to 11,923.46.

Among 11 major sectors of the S&P 500, utilities (SPLRCU) and healthcare stocks (SPXHC) were faring the worst.

Third-quarter earnings season is in its final stretch, with 465 of the companies in the S&P 500 having reported. Of those, 84.5% have beaten consensus estimates, according to Refinitiv data.

This week brings quarterly results from series of high-profile retailers.

Walmart Inc (N:WMT) beat profit expectations and posted a bigger-than-expected 6.4% annual growth in same-store sales.

Home improvement retailer Home Depot Inc (N:HD) also beat quarterly profit and sales estimates as consumers used stay-at-home restrictions to focus on DIY home projects.

Still, Walmart's and Home Depot's stocks were down 0.6% and 3.1%, respectively.

But Kohl's Corp (N:KSS) jumped 8.9% after the department store chain posted a surprise quarterly profit and forecast strong margins for the upcoming holiday season.

Target Corp (N:TGT) and Lowe's Companies Inc (N:LOW) results are expected before the bell on Wednesday.

Shares of Tesla jumped 9.0% after S&P Dow Jones Indices announced it would add the electric automaker to the S&P 500 on Dec. 21.

Amazon.com Inc (O:AMZN) rose 0.7% after it launched an online pharmacy in the United States. Shares of rival drug retailers such as Walgreens Boots Alliance Inc (O:WBA) CVS Health Corp (N:CVS) were both down nearly 9%, on the news.

Advancing issues outnumbered declining ones on the NYSE by a 1.18-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored decliners.

The S&P 500 posted 21 new 52-week highs and no new lows; the Nasdaq Composite recorded 96 new highs and eight new lows.

S&P 500, Dow pull back from record highs as shutdown worries loom
 

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Comments (11)
Justin Marshall
Justin Marshall Nov 17, 2020 3:20PM ET
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yesterday, moderna 95% efficacy. today, the world is ending. the most manipulated thing on the planet is the stock market...
Siddhant Tiwari
Siddhant Tiwari Nov 17, 2020 1:37PM ET
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dow drops as profit booking takes place this can be consider as good buying opportunity to take positions
Joonas Stormbom
Joonas Stormbom Nov 17, 2020 1:37PM ET
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Big bubble
Keval Gala
Keval Gala Nov 17, 2020 1:37PM ET
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Do you think Vaccine will reach each n everyone overnight ? in USA cases increasing like *******. people dying in huge numbers.. no restrictions no lockdown.. winters & Christmas going on.. no chance of vaccine coming before march21
Thom Miller
Thom Miller Nov 17, 2020 1:19PM ET
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Since I’m living rent-free in his empty, uneducated head, Zack the Hack wants facts & figures. OK, Landslide Joe trounced Republican Socialist Donny because.....meaningless, totally ineffective trade tariffs of 30-40% were highest in many, many years at the expense of the free-enterprise system, farmers’ overseas markets dried up so two $25 Billion bailouts were distributed to red-state agriculture, record-high $3.1 Trillion Federal budget deficit equal to 15.2% of GDP (highest in 75 years!) because Covid19 fight was a dismal failure and the US economy had to be bailed out, Federal Bank lowered rates to 0% and printed billions in “funny money” as dictated by failed administration, Federal troops dispatched to disperse a peaceful demonstration near WH so Donny could have a photo op with an upside down Bible, Fascist protesters looted and burned many US cities, military heroes called l..o..s..e..r..s.. and s..u..c..k..e..r..s.., & Trumpers encouraged to inject themselves with Lysol.
Mitchel Pioneer
Mitchel Pioneer Nov 17, 2020 12:46PM ET
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Another miraculous intraday recovery beginning at 10AM as usual.  Only in the first legalized Ponzi scheme in world history.
Navyath Eleti
Navyath Eleti Nov 17, 2020 12:29PM ET
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Nobody used Coronavirus more than the person writing this article. Rinse and Repeat.
rohit singh
rohit singh Nov 17, 2020 12:29PM ET
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good one.
Musical Critic
Musical Critic Nov 17, 2020 12:29PM ET
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Dropping a 100 points is no drop.. It should dtop 10000 -15000 points to be called a drop after so much of pumping.. I still believe we will see that coming.
Abhishek Bal
Abhishek Bal Nov 17, 2020 12:25PM ET
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Disgusting. Market goes up   because of of pfizer vaccine and comes down on fresh cases.
James Bell
James Bell Nov 17, 2020 12:25PM ET
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it's called the hopes fears merry go round.
Unoqueva Alguno
Unoqueva Alguno Nov 17, 2020 11:46AM ET
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It is always the same news!1. vaccine hopes2. covid spike.3. vaccine hopes...please stop!
Raksaksa Tonne
Raksaksa Tonne Nov 17, 2020 11:35AM ET
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The greatest stock market bubble in human history starts unwinding ...
Marqq QQ
Marqq QQ Nov 17, 2020 8:41AM ET
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Could you stop saying that there's always a correlation with the effing virus and market rise/fall? The clickbait speculation is getting tiring.
 
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