Stocks Drop As Economic Worries Weigh, Sterling Up Slightly

NEW YORK: Global equity indexes fell on Wednesday, with the S&P 500 down nearly 1% as negotiations for further fiscal stimulus dragged on, while sterling inched up after recent weakness.

Nasdaq was down about 2% and led losses on Wall Street in afternoon New York trading.

Investors were awaiting news on further U.S. economic relief as the coronavirus pandemic continued to take its toll on the economy.

The U.S. House of Representatives was set to vote Wednesday on a one-week stopgap funding bill that will buy more time to reach a deal on COVID-19 relief, with separate aid packages of more than $900 billion on the table.

“We had a pretty nice boost in the morning on speculation that we might get a new package, but it’s kind of an on-again and off-again thing,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

Johnson & Johnson this week said it could obtain late-stage trial results for a single-dose vaccine in January, earlier than expected.

Britain this week became the first Western nation to begin a wide vaccination campaign. However, Britain injected a note of caution, saying people with a history of significant allergic reactions responded adversely to the Pfizer vaccine.

The Dow Jones Industrial Average fell 146.7 points, or 0.49%, to 30,027.18, the S&P 500 lost 33.28 points, or 0.90%, to 3,668.97 and the Nasdaq Composite dropped 249.93 points, or 1.99%, to 12,332.85.

The S&P 500 had hit a record high earlier in the session.

The pan-European STOXX 600 index rose 0.32% and MSCI’s gauge of stocks across the globe shed 0.62%, also hitting a record high earlier.

Sterling was last trading at $1.3364, up 0.08% on the day.

British Prime Minister Boris Johnson warned the European Union on Wednesday it must scrap demands that he says are unacceptable if there is to be a Brexit trade deal to avoid a turbulent breakup in three weeks.

The dollar index rose 0.278%.

U.S. Treasury yields rose on hopes of more domestic fiscal stimulus.

Benchmark 10-year notes last fell 7/32 in price to yield 0.94%, from 0.91% late on Tuesday.

Oil futures were down modestly, while spot gold prices were down more than 2%, with the start of vaccine treatment reducing safe-haven demand for the precious metal.

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