Stocks drift amid investors’ tug of war between hope, fear
U.S. stocks are drifting in mixed trading on Thursday, as Wall Street’s tug of war continues between worries about the worsening pandemic in the present and optimism that a vaccine will come in the future
NEW YORK — U.S. stocks are drifting in mixed trading on Thursday, as Wall Street’s tug of war continues between worries about the worsening pandemic in the present and optimism that a vaccine will rescue the economy in the future.
The S&P 500 fell 0.2% in midday trading after earlier flipping between small losses and gains. It follows up on a 1.2% slide from the day before, as the benchmark index edged away from its record of 3,626.91 set on Monday.
The Dow Jones Industrial Average was down 133 points, or 0.5%, at 29,305, as of 11:54 a.m. Eastern time, and the Nasdaq composite was 0.4% higher.
Wall Street’s huge November rally has slowed this week as fears about the economy buckling in the near term collide with hopes that stronger growth will arrive next year. A discouraging report on Thursday underscored the fears, showing that more U.S. workers filed for unemployment benefits last week than the week before. It was a worse number than economists expected and the first increase in five weeks.
With infections and hospitalizations on the rise across much of the country, governors and mayors are grudgingly issuing mask mandates, limiting the size of gatherings, banning indoor restaurant dining, closing gyms and restricting the hours and capacity of other businesses.
Investors worry the moves and the worsening pandemic that caused them will hurt corporate profits and shake confidence among consumers, keeping them hunkered at home. New York City’s announcement that it’s halting in-person learning at public schools helped send stocks on their late-day slide Wednesday.
Democrats and Republicans in Washington, meanwhile, are still stymied in their attempts to deliver another dose of financial support to workers and businesses. That has the specter of a bleak winter looming for both the health care system and economy.
Counterbalancing all those fears is hope that coming vaccines can control the pandemic and get the global economy back toward normal next year.
“The market is grappling with the push and pull of the progress with the vaccine track, which allows a window to when our economy can reopen, with the current reality of rising cases,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.
University of Oxford scientists expect to report results from the late-stage trials of the COVID-19 vaccine they’re developing with AstraZeneca by Christmas, a key researcher said Thursday.
Already this month, pharmaceutical companies have offered data suggesting other vaccines under development could be highly effective. Pfizer and BioNTech said Wednesday they plan to ask U.S. regulators within days to allow emergency use of their vaccine.
That had led to a resurgence of interest for stocks that stand to gain the most from a healthy, reopening economy. These were also among the stocks most beaten down by the stay-at-home economy created by the pandemic, such as travel-related businesses, banks and smaller companies.
Investors will likely need more clarity on the timing and impact of a vaccine in order to gain more confidence in the economic recovery, Northey said.
“We saw a sharp recovery to date, but now its beginning to plateau,” he said. “We’re doing that as we head into a very important holiday shopping season.”
A majority of stocks in the S&P 500 were lower in Thursday afternoon trading.
On the winning side of the market was L Brands, the company behind Bath & Body Works and Victoria’s Secret. It jumped 15% after reporting profit for the latest quarter that blew past Wall Street’s expectations.
Nvidia was one of the heavier weights on the S&P 500, falling 0.7%. That was despite reporting a stronger quarterly profit than analysts expected and offering a better-than-expected forecast for the current quarter. Analysts said investors may have been disappointed with some portions of the company’s forecast and noted that expectations have already built to the sky for the tech company. Its stock had surged 128.3% in 2020 through Wednesday.
European stock markets were weaker, with the French CAC 40 down 0.7% and Germany’s DAX losing 0.9%. The FTSE 100 in London dropped 0.8%.
In Asia, markets were mixed. Japan’s Nikkei 225 fell 0.4%, Hong Kong’s Hang Seng lost 0.7% and South Korea’s Kospi inched up by 0.1%. Stocks in Shanghai added 0.5%.
The yield on the 10-year Treasury dipped to 0.85% from 0.86% late Wednesday.
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AP Business Writer Joe McDonald contributed.
