US Stocks Mixed Amid Troubling Coronavirus News

The Nasdaq dipped slightly to join the S&P 500 in the red, but financials helped the blue-chip Dow reverse course for a modest gain.

"The 'Santa rally' will have to wait," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "Troubling news about Covid in the UK has reminded markets that Covid isn't solved yet; the road ahead may be bumpy and uncertain."

Congress hammered out a pandemic relief agreement on Sunday after months of partisan wrangling. The US$900 billion package, expected to pass later in the day, includes unemployment aid, small business relief, and vaccine distribution, but the dollar amount fell short of what many had hoped for.

"Fiscal stimulus plan appears big enough to hold off a recession, but not for long," Carter added. "But while it's not as large as many market participants hoped, it does include many meaningful actions that can support markets."

But the emergence of new, highly infectious strain of Covid-19 in Britain has raised fears of additional shutdowns, and prompted countries around the world to shut their doors to travellers from the United Kingdom.

The news sent airline stocks sliding, even with the prospect of US$15 billion in payroll assistance for commercial carriers included in the stimulus deal. The S&P 1500 Airline index lost 1.2 percent.

Tesla Inc became the most valuable company ever added to the S&P 500 and will account for about 1.69 percent of the index. The electric car maker's stock dropped 6.5 percent.

Banks bucked the trend. The U.S. Federal Reserve released the results of its semi-annual stress test late on Friday and announced relaxed restrictions on buybacks and dividends. The S&P Banking index jumped 2.7 percent.

Goldman Sachs Group surged 6.1 percent, surpassing its pre-Covid share price.

The Dow Jones Industrial Average rose 37 points, or 0.1 percent, to 30,216, the S&P 500 lost 14 points, or 0.4 percent, to 3,694 and the Nasdaq Composite dropped 13 points, or 0.1 percent, to 12,742. (Reuters)