U.S. stocks closed lower on Wednesday, retreating from record levels as investors grew discouraged over the halting progress of economic stimulus talks, while a drop in Facebook shares provided an additional drag.
Investors are banking on a long-awaited relief package to help buttress an economy battered from the COVID-19 pandemic and related lockdowns that has led to millions of layoffs and overwhelmed the healthcare system.
U.S. Senate Majority Leader Mitch McConnell said lawmakers were still looking for a path toward an agreement on COVID-19 aid, as the U.S. House of Representatives prepared to vote on a one-week funding bill to provide more time for a deal.
“We have been in a significant tug-of-war between vaccine news and virus news, and the vaccine news has won,” said Art Hogan, chief market strategist at National Securities in New York.
“The tie-breaker in that tug of war has certainly been the potential for stimulus getting out of this Congress before they head home for the holiday,” he added.
Unofficially, the Dow Jones Industrial Average fell 90.88 points, or 0.3%, to 30,083, the S&P 500 lost 26.95 points, or 0.73%, to 3,675.3 and the Nasdaq Composite dropped 237.68 points, or 1.89%, to 12,345.10.
Positive updates on the COVID-19 vaccine development along with hopes for a fresh fiscal stimulus package have helped fuel a rise in Wall Street’s main indexes to all-time highs, with the S&P 500 surpassing 3,700 points for the first time on Tuesday.
Facebook shares extended declines late in the session after the U.S. Federal Trade Commission and nearly every U.S. state sued the social media company on Wednesday, saying that it broke antitrust law and should potentially be broken up. The news weighed on other mega cap names such as Alphabet and sent the NYSE FANG+ ETF down about 2%.
With overall valuations now at extremely high levels, some investors worry stocks could be more vulnerable to any bad news such as unexpected setbacks in the roll-out of coronavirus vaccines or delays in stimulus.
Two allergic reactions were reported on the first day of the rollout of the Pfizer COVID-19 vaccine, the head of Britain’s medicine regulator said on Wednesday.
DoorDash Inc opened at $182 after pricing at $102 per share in its debut on Wednesday after the food delivery startup raised $3.37 billion in one of the biggest U.S. stock market launches so far in 2020.
Home improvement chain Lowe’s Cos Inc jumped after announcing a new $15 billion share repurchase plan.
Drugmaker Eli Lilly climbed after flagging positive data from a late-stage clinical trial for its experimental drug designed to treat type 2 diabetes.[nL4N2IP3AS]