US stocks tumble ahead of Georgia Senate vote

A supporter dressed as Superman attends a campaign event for Democratic Senate candidate Raphael Warnock in Riverdale, Georgia. PHOTO: BLOOMBERG

NEW YORK (AFP) - Wall Street stocks stumbled on Monday (Jan 4) in the first session of 2021 on anxiety over the Georgia Senate runoffs and worries about a slower recovery from Covid-19.

Polls show both Senate races remain very close, leaving the possibility Republicans could maintain control of the chamber, or that it could go into Democratic hands, which would give incoming President-elect Joe Biden's party control of Congress.

Analysts also cited unease at the worsening public health situation in the United States, with elevated coronavirus cases coming at a time when many hospitals are already at or near capacity.

The rollout of vaccines has also been more problem-filled than expected, potentially slowing down the recovery. Shares fell for several recovery-linked equities, such as Marriott International and United Airlines.

All three major US indices finished decisively lower, with the Dow Jones Industrial Average down 1.3 per cent at 30,223.89.

The broad-based S&P shed 1.5 per cent to 3,700.65, while the tech-rich Nasdaq Composite Index tumbled 1.5 per cent to 12,694.45.

"Traders start to get nervous when either party has a clear shot at getting things done," said Chris Low, chief economist at FHN Financial, who cited tax policy as one area of special concern for investors.

"Traders seemed to be pretty happy with the way elections went initially because of the likelihood of divided government and nothing really radical getting through."

Among individual names, Tesla surged 3.4 per cent after reporting over the weekend it delivered a record number of cars in 2020, just narrowly missing its half a million target for the year.

MGM Resorts dropped 5.7 per cent after British gaming company Entain turned down an £8 billion (S$14 billion) takeover offer, saying MGM undervalued the business.

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