Stocks reverse course after hitting new record highs

Wall Street reversed course on Tuesday, with stocks pulling back one day after reaching new record highs.

Stocks soared Monday after early results from Moderna’s Covid-19 vaccine trial indicated its vaccine is highly effective, giving investors plenty of opportunity to take some profits. Both the Dow and the S&P 500 closed at all-time highs, with the Dow ending just 50 points below the 30,000 mark.

But the exuberance faded Tuesday as investors faced a hard fact: While vaccines against the virus are good news for the medium- and long-term, they make little difference for the here and now.

Given the resurgence in infections around the world, the winter is expected to be tough for businesses and various US states have already ramped up their restrictions on public life once again.

The Dow closed 0.6%, or 167 points, lower, after tumbling as many as 430 points earlier in the day.

The S&P 500 closed down 0.5%. The Nasdaq Composite managed to turn green during the session, but ended up closing 0.2% lower.

Economic data on Tuesday also showed October retail sales missed expectations, and economists are worrying about lower consumer spending in the winter months which could be bad news for the economy.

Meanwhile, various programs designed to relieve economic hardship for workers who found themselves jobless as a result of the crisis will expire at year-end. This benefits cliff is looming over the start to President-elect Joe Biden’s term in January.

Federal Reserve Chairman Jerome Powell reiterated his comments from last week at an event Tuesday afternoon, saying that we won’t recover back to the pre-pandemic economy but rather a new, different economy. But the market shrugged off his comments.