Shares closed broadly lower on Wall Street on Friday after another choppy trading day, concerns about the worsening pandemic undermining growing optimism about an upcoming coronavirus vaccine.
The S&P 500 fell 0.7%, erasing yesterday’s gains. The benchmark, which hit an all-time high on Monday, posted its first weekly decline after two weeks of gains. The index is still up 8.8% so far this month.
Technology, financial and industrial companies drove much of the sales, which became volatile in the last hour of regular trading. Yields on Treasuries were mostly lower, a sign of caution in the market. Stock indexes around the world have made modest movements.
Traders are balancing cautious optimism that an effective coronavirus vaccine will be widely distributed next year against nervousness over the surge in virus cases and the economic impact of new restrictions put in place in the United States on people and businesses to limit the spread.
“It’s a market concerned with growth,” said Quincy Krosby, chief market strategist at Prudential Financial. “This is the great uncertainty.”
The S&P 500 fell 24.33 points to 3,557.54. The Dow Jones Industrial Average slipped 219.75 points, or 0.7%, to 29,263.48. The Nasdaq composite gave up an early gain and fell 49.74 points, or 0.4%, to 11,854.97.
Small business stocks held up better than the rest of the market. The Russell 2000 Small Cap Index rose 1.21 points, or 0.1%, to 1,785.34.
Wall Street suddenly started to falter this week after a large November rally swept the S&P 500 and Dow to record highs. Evidence is mounting for investors both to hope for the outlook for the economy next year and to fear short-term damage.
On Friday, Pfizer and BioNTech announced that they would submit a request to U.S. regulators for emergency use of their vaccine candidate.
Data suggests it may be 95% effective in preventing mild to severe COVID-19 disease.
If approved, a limited number of doses could start being given as early as next month, although large-scale vaccinations will likely not occur until after a potentially brutal winter. Other vaccines are also in development, and it is hoped that one or more vaccines could bring the economy closer to normal next year.
On the pessimistic side, more and more governments around the world are bringing back restrictions on daily life to slow the spread of the virus. Soaring coronavirus numbers and hospitalizations also threaten to scare consumers enough to keep them squatting at home and hurt the economy.
“The market is supposed to be looking to the future, but the reality is that it’s hard to look past what has happened in recent weeks,” said JJ Kinahan, chief strategist at TD Ameritrade.
“The other thing that is of major concern is the people who find themselves locked out in the main areas of the country. What is it going to be for businesses? “
The governor of California on Thursday evening announced a curfew for most residents of the state, the Centers for Disease Control and Prevention is asking Americans not to travel on Thanksgiving, and authorities in Lisbon in Sri Lanka have announced varying degrees restrictions.
“On the road on the other side of the pandemic there are detours and we are on one of those detours,” Krosby said.