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The Canadian press
Wall Street beats the brakes after its record run
NEW YORK – US stocks are down in early trading on Tuesday, returning some of the large gains made this month that took them to record highs. Treasury yields also fell after a report showed US buyers spent less at retailers last month than economists forecast. The numbers underscore how the coronavirus pandemic is continuing to worsen and threatening to drag the economy down, at least in the short term. Stocks that stormed this month in hopes that a vaccine or two could bring the global economy back to normal next year have receded amid concerns, particularly airlines, energy producers and other companies that they would benefit most from a reopening of the economy. The S&P 500 fell 0.9% in early trading, at the rate of its first decline in three days. The Dow Jones Industrial Average was also falling from its record high, and was down 369 points, or 1.2%, to 29,581 at 9:52 am Eastern Time. The Nasdaq composite was 0.5% lower. The heavy losses for pharmaceutical companies helped drag the market down after Amazon targeted them as the last industry it is trying to overturn. The retail giant opened an online pharmacy on Tuesday that allows customers to receive recipes at home in a couple of days. CVS Health was down 7.6%, Walgreens Boots Alliance was down 7.9%, and Rite-Aid was down 12.9%. Amazon, meanwhile, was up 1.1%. On the side of the winners was Tesla, which was up 12.1% after the announcement that it will join the S&P 500 index next month. The index is hugely influential and nearly $ 4.6 trillion at the end of last year was in funds mimicking the S&P 500. The electric vehicle company had already climbed 388.8% in 2020 before the announcement of the Monday evening index. It has grown so much that the company behind the S&P 500 asks investors if they think it should add Tesla to the index all in one go or in two steps. The broader stock market was slowing on Tuesday, however, and 89% of the shares in the S&P 500 were lower. Sales at US retailers rose 0.3% last month since September, a sharp slowdown from the 1.6% growth in September. The figure also fell short of economists’ expectations for 0.5% growth. Part of the deficit is likely due to the fact that laid-off workers no longer receive extra unemployment benefits from the US government after several Congressional financial support programs expire. Democrats and Republicans in Washington have talked about the possibility of renewing some programs, but progress has been painfully slow amid deep partisanship in Washington. This adds to the already accelerating pandemic, which is prompting governments in the United States and Europe to bring back varying degrees of restrictions on daily life in hopes of slowing the spread of the virus. Health experts warn of a bleak winter ahead. All of this has helped to dilute some of the optimism that has spread in the markets since the beginning of last week. The companies have released encouraging first results for a couple of potential COVID-19 vaccines, which gives hope that the economy can return to normal and that stocks cut down during the pandemic can come back to life. Even with Tuesday’s decline, the S&P 500 is still up 10% for November so far. It is better than any monthly index performance since April, when stocks were exploding higher after the pandemic-induced slump. The 10-year Treasury yield fell to 0.86% from 0.89% late Monday. In Europe, the German DAX lost 0.4% and the French CAC 40 slipped 0.3%. London’s FTSE 100 fell 1.5%. In Asia, the stocks were mixed. Japan’s Nikkei 225 was up 0.4% and Hong Kong’s Hang Seng was up 0.1%. South Korea’s Kospi lost 0.2% and Shanghai shares lost 0.2%. ___ AP Business writer Yuri Kageyama contributed. Stan Choe, The Associated Press
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