Stocks pause after vaccine-fueled rally

·4-min read
Britain became the first country to approve a Covid-19 vaccine, and the drug could be rolled out as soon as next week

Global stocks were mixed Wednesday as a rally fueled by vaccine hopes began to peter out despite confirmation that Britain will next week begin rolling out Pfizer-BioNTech's innoculation 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 four-week lockdown and re-imposed regional curbs.

But European and US 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 four of 12 regions seeing little or no growth, and four 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.

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 EU 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 OPEC 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.

Among individual companies, Salesforce dropped 8.5 percent 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 percent.

- Key figures around 2150 GMT -

New York - Dow: UP 0.2 percent at 29,883.79 (close)

New York - S&P 500: UP 0.2 percent at 3,669.01 (close)

New York - Nasdaq: DOWN 0.1 percent at 12,349.37 (close)

London - FTSE 100: UP 1.2 percent at 6,463.39 (close)

Frankfurt - DAX 30: DOWN 0.5 percent at 13,313.24 (close)

Paris - CAC 40: UP less than 0.1 percent at 5,583.01 (close)

EURO STOXX 50: DOWN 0.1 percent at 3,521.32 (close)

Tokyo - Nikkei 225: UP 0.1 percent at 26,800.98 (close)

Hong Kong - Hang Seng: DOWN 0.1 percent at 26,532.58 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,449.38 (close)

Euro/dollar: UP at $1.2121 from $1.2071 at 2200 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 percent at $45.28 per barrel

Brent North Sea crude: UP 1.8 percent at $48.25 per barrel