US stocks retreat from records amid Covid-19 gloom

Subway riders pass an ad for face masks at the Times Square station in Manhattan. PHOTO: REUTERS

NEW YORK (AFP) - US equities had another bumpy ride on Tuesday (Nov 17), pulling back from new records to close lower as the spike in coronavirus infections undermined tentative optimism about the economic recovery.

The bellwether Dow Jones Industrial Average fell 0.6 per cent to end at 29,783.35, after finishing at an all-time high on Monday.

The S&P 500, which also closed at a record Monday, lost 0.5 per cent to 3,609.53, while the tech-rich Nasdaq Composite Index dipped 0.2 per cent to 11,899.34.

Wall Street has lurched up and down in recent weeks, with changing economic fortunes. The recent rally has been propelled by optimism over news of two successful coronavirus vaccines.

But sentiment has been blunted by worries over skyrocketing Covid-19 cases that are leading to new restrictions and undermining hopes economic activity can return to normal soon.

Federal Reserve Chair Jerome Powell highlighted the need for caution, noting "significant challenges and uncertainties" about the timing, production, distribution and efficacy of the vaccines.

"With the virus now spreading at a fast rate, the next few months may be very challenging," Powell said in a discussion.

"So it's probably too soon to say with any confidence what the impact on the path of the economy will be from the vaccines."

Commerce Department data showed retail sales in October increasing by a disappointing 0.3 percent from September.

The data indicate slowing growth in a sector that bounced back from the pandemic downturn faster than most others thanks to massive government assistance that kept consumers flush.

Analysts also noted that stocks have already risen significantly this month, and were due for a pause or pullback.

"It doesn't seem that the market is really in any danger of giving back any serious gain," Peter Cardillo of Spartan Capital told AFP.

Amazon edged up 0.1 per cent after it said it would set up an online pharmacy, which sent CVS Health slumping 8.6 per cent and Walgreens Boots Alliance plunging 9.6 per cent.

Tesla surged 8.2 per cent in the first trading session since S&P Dow Jones Indices said the electric car company officially qualified to join the prestigious S&P 500.

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