US stock markets retreat from record gains - RTHK
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US stock markets retreat from record gains

2020-11-18 HKT 05:48
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  • Wall Street closed lower as concerns about the pandemic's impact on demand sidelined investors. File photo: Shutterstock
    Wall Street closed lower as concerns about the pandemic's impact on demand sidelined investors. File photo: Shutterstock
US financial markets backtracked from their recent record closing highs, ending lower on Tuesday as surging Covid-19 cases, the growing threat of a fresh round of economic lockdowns and weak retail sales data dampened the euphoria caused by potential vaccine breakthroughs.

The 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.

Monday's rally was prompted by Moderna's announcement that its Covid-19 vaccine candidate appears to be 94.5 percent effective in preventing infection.

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

"It's going to be the vaccine versus the virus, flip-flopping back and forth until we get to the point where the vaccine is rolled out," said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. "It's like standing on the edge of a valley - I can look down and see the rising case loads or I can look across to the vaccine."

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 Dow Jones Industrial Average fell 0.6 percent to 29,783, the S&P 500 lost just under 0.5 percent to 3,609 and the Nasdaq Composite dropped 0.2 percent to 11,899.

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

Walmart beat profit expectations and posted a bigger-than-expected 6.4 percent annual growth in same-store sales.

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

Shares of Tesla jumped 8.2 percent after S&P Dow Jones Indices announced it would add the electric automaker to the S&P 500 on Dec. 21.

Amazon launched an online pharmacy in the United States, sending shares of rival drug retailers Walgreens Boots Alliance CVS Health Corp down 9.6 percent and 8.6, respectively. (Reuters)