Stocks fell Tuesday as optimism over a coronavirus vaccine faded somewhat with the reality that the pandemic continues to escalate in the U.S. and across the globe.
The Dow Jones Industrial Average fell 375 points, or 1.26%, to 29,574, the S&P 500 declined 0.87% to 3,595 and the Nasdaq dipped 0.35%.
The Dow and S&P 500 surged to record closing highs Monday after Moderna (MRNA) – Get Report said its coronavirus vaccine candidate was 94.5% effective in a late-stage clinical trial. The Dow rose by 470 points, or 1.6%, to 29,950, the S&P 500 rose 1.16% to 3,626.91, and the Nasdaq ended up 0.8%.
The Dow last set a record closing high on Feb. 12, just weeks before the coronavirus began spreading across the country.
That spread has been relentless so far this fall, with cases climbing in every state and hospitalizations from Covid-19, the disease caused by the coronavirus, setting a record high on Monday.
Many states across the country have implemented lockdowns again as they did in early spring to control the spread of the virus. California’s indoor businesses were hit with new restrictions, while Iowa issued a limited mask mandate. Oregon, Washington and New Jersey also tightened restrictions.
Retail sales in the U.S., meanwhile, rose at a slower-than-expected pace in October as spending slowed amid steady increases in weekly applications for unemployment benefits as the pandemic continued to accelerate.
“We just reached new highs, so it’s natural for the market to take a breather – and the slightly disappointing read on the retail sales front is facilitating that,” said Chris Larkin, managing director of trading and investing product at E*Trade. “And without stimulus checks coming in, there’s a bit of uncertainty in this sector in the short term. That said, it’s still a positive read and so far retail earnings this week have painted a slightly different picture with Walmart and Home Depot knocking it out of the park.”
U.S. same-store sales rose 6.4%, topping forecasts, “with strength across key categories, including general merchandise, health & wellness and food,” Walmart said. E-commerce sales surged 79%, adding around 570 basis points to the overall comparable sales total.
The stock declined 0.45% to $151.75
Home Depot’s (HD) – Get Report third-quarter earnings were better than expected and the world’s largest home-improvement retailer said it plans to spend around $1 billion on bonuses and compensation increases for its frontline workers.
Tesla (TSLA) – Get Report soared almost 11% Tuesday following the announcement the electric carmaker will be added to the S&P 500 on Dec. 21.