The Nasdaq Composite gained altitude Thursday afternoon, but the broader stock-market was mixed as investors weighed the impact of rising cases of COVID-19 and new social-distancing restrictions on the economic outlook.
The Dow Jones Industrial Average fell 50 points, or 0.2%, to 29,385, while the S&P 500 index was up about 2 points, or less than 0.1%, at 3,567. The Nasdaq Composite Index advanced 77 points, or 0.7%, to trade at around 11,878, with all three benchmarks well off their early lows.
Investors were seeking cover and edging back into buying large-capitalization technology-related stocks, amid a continued surge in COVID-19 infections and the lack of any progress toward additional aid spending by Congress.
The mixed trade on Wall Street comes as strategists and investors weigh positive developments toward a COVID-19 vaccine and its impact on the future of the U.S. economic recovery.
“The death toll in the United States from COVID-19 has now surpassed 250,000, but what really shook Wall Street on Wednesday was news from closer to home,” said Raffi Boyadjian, senior investment analyst at XM, in a note, referring to the decision to close New York City public schools beginning Thursday.
New York City announced the closure of all public schools after the city’s positivity rate from virus tests reached a seven-day average of 3%—the threshold set to keep schools open.
“Concerns about the health crisis and the lockdowns is the main theme of the session,” wrote David Madden, market analyst at CMC Markets UK.
“Other states, counties and cities across America also tightened their virus curbs as infections are rising uncontrollably, showing no sign of plateauing and overwhelming health services,” Boyadjian noted.
“This isn’t the trajectory we want to see, and it underscores the fact that lockdowns kicking in across the country have a very real and negative effect on the labor market,” wrote Mike Loewengart, managing director of investment strategy at E-Trade Financial in emailed remarks.
On Wednesday, the U.S. recorded 172,391 new cases and at least 1,923 deaths, according to New York Times data. That lifted the daily average over the past week to 162,816, up 77% from two weeks ago. The number of U.S. deaths stood at 250,548 as of Wednesday.
Meanwhile, progress continues toward a vaccine. Pfizer Inc. and BioNTech SE on Wednesday said their vaccine candidate was 95% effective, according to a final analysis of clinical trial data. Moderna Inc. on Monday said its vaccine candidate was 94.5% effective. Both are expected to apply for U.S. regulatory authorization within days.
On Thursday, British drugmaker AstraZeneca PLC said the experimental vaccine it is developing with the University of Oxford showed a robust immune response in older adults, based on data from mid-stage trials.
“Traders haven’t forgotten about the hopeful news from Moderna and Pfizer-BioNTech with respect to vaccines but concerns about damage being done to the economy is in focus today,” Madden wrote.
On the data front, U.S. applications for state unemployment benefits rose in mid-November for the first time in more than a month, pointing to added stress on the economy from a record increase in coronavirus cases.
Initial jobless claims increased by a seasonally adjusted 31,000 to 742,000 in the seven days ended Nov. 14. Economists polled by MarketWatch had forecast initial jobless claims to total 710,000.
“The first jump in jobless claims in weeks puts into perspective where we stand on the stimulus front—which is pretty much nowhere as of now,” Loewengart said, referring to continued hopes for fiscal relief to help businesses and workers who have been financially harmed by the pandemic.
Separately, a report on manufacturing activity in the Philadelphia area showed a fall of 6 points to 26.3 in November.
An update on leading economic indicators rose 0.7% last month, the Conference Board said Thursday, following an increase of 0.7% in September and 1.6% in August. And U.S. existing home sales increased 4.3% to 6.85 million rate in October.
The pan-European Stoxx 600 index closed 0.6% lower, while the U.K.’s FTSE 100 index booked a 0.8% decline. In Asian markets, China’s Shanghai Composite Index closed 0.5% higher, the CSI 300 finished up 0.7%, while Hong Kong’s Hang Seng booked a 0.7% loss. Japan’s Nikkei 225 index closed 0.4% lower.
The yield on the 10-year Treasury note fell 3 basis points to 0.85%. Yields and prices move in opposite directions.
The ICE U.S. Dollar Index a gauge of the greenback’s strength against its major rivals, was up 0.2% at 92.45.
Crude-oil futures pulled back, down 0.8% after notching their highest settlement since September on vaccine optimism, to trade at $41.48 a barrel. Meanwhile, gold futures fell $10.80, or 0.6%, to trade at $1,863 an ounce.
-With reporting from William Watts
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