Wednesday, February 21, 2024

Wall Street opens lower following new virus restrictions

by Associated Press

NEW YORK (AP) — Stocks are opening moderately lower on Wall Street following a new wave of restrictions in the U.S. to combat a surge in coronavirus infections. The S&P 500 lost 0.7% in the early going Tuesday. The Dow Jones Industrial Average, which closed at a record high a day earlier, gave up 1.1%. The tech-heavy Nasdaq was down only slightly, thanks partly to gains in Tesla and Amazon. Tesla jumped 11% following news late Monday that it would be added to the benchmark S&P 500 index next month, and Amazon rose 1% after opening an online pharmacy.

Global shares were mixed Tuesday as optimism that a vaccine might soon control the coronavirus buoyed only some regional indexes.

France’s CAC 40 slipped 0.2% in early trading to 5,460.09, while Germany’s DAX was down nearly 0.2% at 13,119.47. Britain’s FTSE 100 dipped 0.4% to 6,395.76. U.S. shares were set to drift lower with Dow futures slipping 0.2% to 29,810.0. S&P 500 futures lost 0.3% to 3,611.50.

Moderna said its COVID-19 vaccine appears to be 94.5% effective, according to preliminary data. It’s the second time this month that a company announced such encouraging numbers about a vaccine, boosting hopes that the global economy can return to some semblance of normalcy next year.

Japan’s benchmark Nikkei 225 rose 0.4% to finish at 26,014.62, a 29-year high. Australia’s S&P/ASX 200 gained 0.2% to 6,498.20. South Korea’s Kospi lost its earlier gains and slipped 0.2% to 2,539.15. Hong Kong’s Hang Seng edged up 0.1% to 26,415.09, while the Shanghai Composite slipped 0.2% to 3,339.90.

“The vaccine-driven fervor had continued into the fresh week with even better trial results further inspiring markets to anticipate a virus-free reality in the not too far away future,” said Jingyi Pan, senior market strategist with IG in Singapore. “Asia-Pacific markets continue to bask under the vaccine glow.”

Even as a new surge in COVID-19 infections hit Japan, the economy rebounded in the third quarter. The recovery has still not reached pre-pandemic levels, but such signs are raising optimism about things returning to business as normal in the world’s third-largest economy.

Fitch Solutions Country Risk and Industry Research revised its growth projection for Japan this year to a more moderate contraction of 6.3%, from an earlier forecast of an 8.8% contraction. For 2021, Fitch projects a return to 2.7% growth, which is better than its earlier forecast of 2.1% growth.

“In 2021, we believe that the holding of the Summer Olympics as well as the likely availability of a COVID-19 vaccine could likely lead to a sharper upsurge in domestic demand, driving our forecast revision,” it said.

The Tokyo Games have been postponed a year to the summer of 2021. International Olympic Committee President Thomas, visiting Tokyo this week, has sought to send a message of assurance that the games will go on next year.

Bach said a “reasonable number” of fans should be able to attend the venues, vaccine or no vaccine, and stressed he wants “as many foreign participants as possible to accept a vaccine.”

Risks remain for global markets. Even if the vaccines are finally approved, it’s still uncertain when they could be widely distributed.

The pandemic is continuing to worsen, with rising coronavirus counts across the United States and Europe pushing governments to bring back varying degrees of restrictions on businesses. Some areas of the U.S. economy have been slowing, particularly after big financial support programs passed by Congress expired.

In energy trading, benchmark U.S. crude oil slipped 20 cents to $41.14 per barrel. Brent crude, the international standard, fell 13 cents to $43.69 a barrel.

In currency trading, the dollar declined to 104.26 Japanese yen from 104.90 yen. The euro cost $1.1869, up from $1.1845.

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