NEW YORK (Reuters) – Shares on Wall Street closed sharply on Monday, falling from historic peaks on the first trading day of the year, with risk appetite waning amid the second round of Georgia elections and the increase persistent of coronavirus cases.
The Dow, which hit a record early in the session with the S&P 500, was also pulled down by a drop of more than 4% in Boeing Co shares after Bernstein downgraded its rating to “underperforming”, citing concerns about cash flow.
All three major indices hit two-week lows, with record highs on the Dow and S&P 500 extending a 2020 high fueled by monetary stimulus and the start of vaccine launches.
The fate of US President-elect Joe Biden’s agenda, meanwhile, including rewriting the tax code, stimulus and spending on infrastructure, depends firmly on Tuesday’s two Senate contests in Georgia’s battle state that will determine control. the camera.
The Wall Street fear meter peaked at two weeks on Monday.
“Stocks are declining after an impressive year of gains,” said Brian Reynolds, chief market strategist at Reynolds Strategy.
“We are starting with a virus that is out of control. We will probably end 2021 with a virus that may already be under control. The way we start from beginning to end will be fraught with frequent setbacks because people will be looking at short-term headlines, ”he added.
The total number of deaths in the United States from COVID-19 has reached more than 350,000.
Almost all of the S&P sectors fell, with real estate, public services and industry showing the sharpest percentage drops. Consumer goods and discretionary materials reached historic levels at the beginning of the trading session.
The Dow Jones Industrial Average fell 382.59 points, or 1.25%, to 30,223.89, the S&P 500 lost 55.42 points, or 1.48%, to 3,700.65 and the Nasdaq Composite fell 189.84 points , or 1.47%, to 12,698.45.
The S&P 500 and Dow reported their biggest daily percentage drops since late October, while the Nasdaq had its biggest loss since December 9.
“Investors are at a point where they want to breathe while evaluating all the different things that will come in the new year,” said Lindsey Bell, chief investment strategist at Ally Invest in Charlotte, North Carolina.
In terms of data, US manufacturing activity increased at its fastest pace in more than six years in December, a survey showed on Monday. It comes in the wake of optimistic research on manufacturing activity in Europe and Asia earlier in the day.
Some investors are cautious about the pace of economic growth, as unemployment claims in the U.S. remain stubbornly high, while a new round of pandemic-related restrictions last month and a new variant of the coronavirus cast a shadow over the outlook.
Tesla Inc’s shares extended a meteoric rise to a record high after the electric car maker reported better-than-expected vehicle deliveries in 2020.
FLIR Systems Inc’s shares jumped more than 19% after Teledyne Technologies Inc agreed to buy the thermal imaging camera supplier for $ 8 billion in cash and shares. Teledyne’s shares, however, fell 7.5%.
Decreasing issues outperformed early issues on the NYSE by 2.14 to 1; on the Nasdaq, a 1.43 to 1 ratio favored the declines.
The S&P 500 recorded 54 new 52-week highs and no new lows; the Nasdaq Composite recorded 151 new highs and 19 new lows.
The volume on the US stock exchanges reached 14.15 billion shares, compared to the average of 10.94 billion for the entire session in the last 20 trading days.
Reporting by Gertrude Chavez-Dreyfuss; Editing by Marguerita Choy