Pandemic, US Deficit Send Stock Markets Lower

The Nasdaq tumbled on Monday, ending a three-session streak of records on a weak day for US stocks amid fresh restrictions in California to address the coronavirus.

The Nasdaq Composite Index dropped 2.1 percent to 10,390.

The Dow Jones Industrial Average mustered a narrow gain of 0.04 percent at 26,085, while the S&P 500 shed 0.9 percent to 3,155.

Stocks had opened solidly higher following an announcement from Pfizer and BioNTech announcing that two of four vaccine candidates for the coronavirus received "Fast Track" designation from the US Food and Drug Administration.

But equities turned sharply lower in the final two hours of trading.

California Governor Gavin Newsom ordered all indoor restaurants, bars and movie theatres to close again as coronavirus cases soar across the state, the latest retreat in reopening the nation's most-populous state.

The move comes on the heels of other restrictions imposed in Texas, Arizona and other major states that are also contending with big jumps in Covid-19 cases.

Briefing.com analyst Patrick O'Hare attributed the decline to the massive increase in the US deficit in the wake of emergency spending to blunt the impact of the pandemic, which came in at US$864 billion in June compared with US$8 billion in the year-ago period.

That figure was "sobering" and weighed on the market that many had viewed as overbought, O'Hare said.

"It was a market that was ripe for a pullback," said O'Hare, who added that investors are also cautious ahead of earnings releases from JPMorgan Chase and other large banks in the coming days. (AFP)