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Stocks pause after vaccine-fueled rally

Agence France-Presse

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Stocks pause after vaccine-fueled rally

TRADING. A Wall Street sign outside the New York Stock Exchange in New York City on November 30, 2020.

Photo by Angela Weiss/AFP

European and United States investors largely shrug off the news that Britain has approved the Pfizer-BioNTech COVID-19 vaccine for rollout

Global stocks were mixed on Wednesday, December 2, as a rally fueled by vaccine hopes began to peter out despite confirmation that Britain will next week begin rolling out Pfizer-BioNTech‘s inoculation against COVID-19.

Prime Minister Boris Johnson hailed the “fantastic” news after the British independent medicines regulator approved the vaccine just 12 months after the pandemic began in China, while urging the public to remain cautious as England exited a 4-week lockdown and reimposed regional curbs.

But European and United States investors largely shrugged off the news, which was already baked into valuations.

“The lack of market reaction suggests that this decision was probably widely expected at some point,” noted Michael Hewson, chief market analyst at CMC Markets UK.

On Wall Street, the S&P 500 edged to a fresh record, but none of the major US indices moved significantly as investors weighed signs of economic weakness caused by rising COVID-19 cases against further progress on vaccines.

Private-sector US hiring data lagged estimates, while the Federal Reserve released a fairly downcast report on economic conditions, with 4 of 12 regions seeing little or no growth, and 4 others seeing activity begin to dip last month.

While firms in most districts still have positive outlooks, “optimism has waned” amid “concerns over the recent pandemic wave, mandated restrictions (recent and prospective), and the looming expiration dates for unemployment benefits and for moratoriums on evictions and foreclosures,” the Fed report said.

Investors are also eyeing the latest Capitol Hill efforts to revive stimulus, although it isn’t clear a deal will happen. 

US House Speaker Nancy Pelosi on Wednesday threw her support behind a $908-billion compromise relief package proposed by a bipartisan group of lawmakers on Tuesday, December 1.

However, Republican Senate Majority Leader Mitch McConnell has been holding out for a much more limited measure.

“It is hard to get excited stocks given the elevated levels and uncertainty over how much stimulus Congress will be able to deliver before the end of the year,” said Edward Moya at currency trading platform Oanda.

British pound falls

Earlier, London’s FTSE 100 was an outperformer, although that was probably less about vaccines than a reflection of a drop in the British currency. 

The pound slid against the dollar and euro, as European Union Brexit negotiator Michel Barnier told diplomats he could not guarantee a trade deal being agreed with Britain ahead of a December 31 deadline.

Elsewhere in trading, oil prices rose on reports that the Organization of the Petroleum Exporting Countries and other major producers have made progress towards reaching an agreement on extending output cuts that have provided support to the commodity through the pandemic.

They were set to meet again on Thursday, December 3. 

Among individual companies, Salesforce dropped 8.5% after it announced a $27.7-billion acquisition of Slack Technologies, giving the business software giant a broader array of tools as the pandemic fuels a remote work trend. 

Some analysts questioned the transaction, including whether the price was too high. Slack fell 2.6%.

Key figures around 9:50 pm GMT
  • New York – Dow: UP 0.2% at 29,883.79 (close)
  • New York – S&P 500: UP 0.2% at 3,669.01 (close)
  • New York – Nasdaq: DOWN 0.1% at 12,349.37 (close)
  • London – FTSE 100: UP 1.2% at 6,463.39 (close)
  • Frankfurt – DAX 30: DOWN 0.5% at 13,313.24 (close)
  • Paris – CAC 40: UP less than 0.1% at 5,583.01 (close)
  • EURO STOXX 50: DOWN 0.1% at 3,521.32 (close)
  • Tokyo – Nikkei 225: UP 0.1% at 26,800.98 (close)
  • Hong Kong – Hang Seng: DOWN 0.1% at 26,532.58 (close)
  • Shanghai – Composite: DOWN 0.1% at 3,449.38 (close)
  • Euro/dollar: UP at $1.2121 from $1.2071 at 10 pm GMT 
  • Pound/dollar: DOWN at $1.3371 from $1.3420
  • Dollar/yen: UP at 104.41 yen from 104.33 yen
  • Euro/pound: UP at 90.62 pence from 89.95 pence
  • West Texas Intermediate: UP 1.6% at $45.28 per barrel
  • Brent North Sea crude: UP 1.8% at $48.25 per barrel


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