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Dow Falls Nearly 900 Points, Oil Drops as Delta Variant Sends Investors Into Bonds


Stocks, oil prices and government-bond yields slid Monday as anxiety mounted over the spread of the Delta coronavirus variant and its potential impact on the global economy.

The Dow Jones Industrial Average slumped 876 points, or 2.5%, in afternoon trading, putting the index on track for its worst one-day drop in point terms since October.

The S&P 500 fell 2%, while the technology-heavy Nasdaq Composite declined 1.3%. Monday’s losses marked an acceleration after U.S. stock indexes retreated last week, snapping a three-week winning streak.

Investors sheltered in the safety of government bonds. The yield on 10-year Treasury notes fell to 1.182%—its lowest level since February—from 1.30% Friday. Bond yields fall when bond prices climb.

Oil prices fell after the Organization of the Petroleum Exporting Countries and a Russia-led group of big producers agreed to raise production. Futures on Brent crude, the international benchmark, tumbled 6.7% to $68.68 a barrel, their lowest level in more than six weeks.

The moves were reminiscent of trading patterns that prevailed in the early days of the pandemic. Investors sold shares of companies directly affected by restrictions on movement and business, while buying government bonds and stocks that stood to benefit from renewed lockdowns.

American Airlines Group,


AAL -4.51%

United Airlines

and cruise operator

Carnival

were all down at least 4.5%. Energy producers

Marathon Oil

and

Occidental Petroleum


OXY -5.09%

both tumbled more than 5%.

Stocks that climbed included supermarket-chain

Kroger,


KR 3.71%

which rose 3.4%, and online-crafts marketplace

Etsy,


ETSY 2.80%

which was up 2.8%.

Surging cases of the coronavirus in many parts of the world, including highly vaccinated countries such as the U.K., have prompted investors to dial down their expectations of economic growth in the coming months. Last week, some of California’s most populous counties either reimposed mask mandates or recommended wearing masks indoors to fight the Delta variant.

“The emergence of this more highly transmissible Delta variant…has brought into the question the sustainability of this reopening and the recovery,” said

Candice Bangsund,

a portfolio manager at Fiera Capital. Still, she said the variant would delay rather than derail a big pickup in economic activity and called the selloff a chance to scoop up shares of energy producers, industrial firms and financial companies.

The inflation rate reached a 13-year high recently, triggering a debate about whether the U.S. is entering an inflationary period similar to the 1970s.

Despite Monday’s selloff, the S&P 500 is up more than 12% this year and closed at a record just one week ago.

“The market has been due for a pause or pullback or, dare I say it, a correction,” said Hans Olsen, chief investment officer of Fiduciary Trust.

Some investors also are concerned that rising prices will pinch consumption and prompt central banks to withdraw stimulus, creating an environment of lower growth and higher inflation in which stocks tend to struggle.

Inflation accelerated to a 13-year high in the U.S. in June. Some evidence suggests that the price increases have started to knock consumers’ confidence in their ability to keep spending. For much of 2021, business reopenings, rising vaccination rates and government pandemic aid have helped propel rapid gains in consumer spending, the economy’s main driver.

“What you’re seeing is a sense that the consumer is starting to be affected quite significantly” by the jump in prices, said

Sebastien Galy,

senior macro strategist at Nordea Asset Management.

All 11 sectors of the S&P 500 dropped Monday. Energy and financials were the worst-performing groups.

One bright spot was

Five9,


FIVN 6.13%

which jumped 4.8% on news that

Zoom Video Communications


ZM -2.43%

plans to buy the provider of cloud-based customer-service software in a deal valuing the firm at $14.7 billion. Zoom shares shed 4.1%.

The National Bureau of Economic Research said Monday that the U.S. officially climbed out of a recession in April 2020. The pandemic-driven recession was two months long, making it the shortest on record, according to the bureau, the official arbiter of U.S. recession dates.

Looking ahead, investors will be monitoring corporate earnings this week for signs of how companies are faring amid the revival of economic activity. Air carriers American and United are among the hundreds of companies set to report quarterly results this week, along with

Intel,


INTC -1.08%

Netflix


NFLX -0.15%

and

Chipotle Mexican Grill.


CMG -1.45%

Overseas, major stock markets retreated amid fears of the Delta variant. The Stoxx Europe 600 slid 2.3%, dragged down by shares of travel, leisure and commodities companies, as well as banks.

In Asia, technology giants

Alibaba

and

Tencent

weighed on Hong Kong’s Hang Seng Index, which fell 1.8%.

Surging Covid-19 cases in many parts of the world have prompted investors to dial down economic growth expectations.



Photo:

Richard Drew/Associated Press

Japan’s Nikkei 225 dropped 1.3%. More athletes and staff members attending the Tokyo Olympics have tested positive, while cases are surging in Indonesia. Sydney, Australia’s most populous city, is under lockdown because of a Delta outbreak.

David Chao, a market strategist at Invesco, said the spread of the Delta variant across Asia, coupled with low vaccination rates and expectations of additional social-distancing measures, has “taken wind out of the sail for many investors expecting an economic rebound” in the region.

Mr. Chao said he expected investors to continue to pull funds out of Asian stocks and shift them to shares in developed markets with high inoculation rates, such as the U.S. and U.K.

Write to Joe Wallace at [email protected], Alexander Osipovich at [email protected]jones.com and Frances Yoon at [email protected]

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Stock Futures Drift Higher Ahead of Powell Testimony


U.S. stock futures ticked up Wednesday ahead of testimony from Federal Reserve Chairman

Jerome Powell.

Futures for the S&P 500 edged up 0.2%, while contracts for the Dow Jones Industrial Average were relatively flat, suggesting that both major indexes may tread water at the opening bell. The S&P 500 fell 0.4% on Tuesday. Nasdaq-100 futures rose 0.5% Wednesday, signaling that technology stocks will outperform for a second day.

Stocks have powered to record highs on expectations of a strong economic rebound and a bumper set of corporate results in the earnings season just getting under way. However, some investors are wary of potential hurdles for the broad market rally up ahead.

One factor making money managers cautious is uncertainty about how long the bout of higher inflation—running at its quickest pace in 13 years—will last and how the Fed will respond. Another is the spread of the delta variant of coronavirus, which on Wednesday prompted Australian officials to extend a lockdown of Sydney, while South Korea tightened curbs.

“We would not be surprised if you had a bit of a pullback,” said Daniel Morris, chief market strategist at BNP Paribas Asset Management.

Longer term, however, Mr. Morris is bullish about the outlook for the market. “You’ve still got phenomenal growth and at the end of the day, it is earnings, earnings, earnings that drive equity prices.”

BlackRock

shares fell 2.1% before the market opened. The fund-management giant said it added $81 billion in new investor money in the second quarter, less than it did a year ago.

Bank of America

shares lost 1.9% in premarket trading after the bank posted revenue that fell short of analysts’ expectations.

Rival lenders

JPMorgan Chase

and

Goldman Sachs Group

kicked off the reporting season with blockbuster results on Tuesday.

Shares of

Delta Air Lines

gained 2.1% premarket after the airline reported its first quarterly profit since the start of the coronavirus pandemic. Apple rose 2% after Bloomberg News reported that the company had asked suppliers to make 20% more new iPhones than in recent years.

Oil prices slid after the Organization of the Petroleum Exporting Countries reached a compromise with the United Arab Emirates over production, resolving a standoff that whipsawed energy markets this month. Brent-crude futures, the international benchmark, ticked down 0.2% to $76.36 a barrel in a choppy session.

In bond markets, the yield on 10-year Treasury notes edged down to 1.385%, from 1.415% on Tuesday. Bond yields and prices move in opposite directions.

Data showing that U.S. consumer prices jumped 5.4% in June from a year earlier have sharpened focus on Mr. Powell’s appearance before the House Financial Services Committee. Mr. Powell is due to present the central bank’s twice-yearly report on monetary policy starting at noon ET, followed by testimony to the Senate on Thursday.

Wall Street indexes fell on Tuesday after a higher-than-expected consumer price report.



Photo:

brendan mcdermid/Reuters

Investors will be alert for any guidance about when and how the Fed plans to wind down its bond-buying program. They are also looking for clarity about the central bank’s willingness to let inflation run above target.

“What investors want to know more of is: What do you mean by average inflation targeting?” said Remi Olu-Pitan, a fund manager at Schroders. That is the new system adopted by the Fed almost a year ago, under which the central bank will allow inflation to overshoot its 2% goal to make up for periods when it lagged behind.

In overseas markets, the Stoxx Europe 600 slipped 0.2%, led lower by shares of travel, leisure and real-estate companies.

Japan’s Nikkei 225 lost 0.4% by the close of trading and China’s Shanghai Composite Index dropped 1.1%. A regulatory crackdown on consumer-technology companies is making investors nervous about the Chinese market even as the People’s Bank of China appears to be stimulating the economy, Ms. Olu-Pitan said.

New Zealand’s dollar rose 1% to $0.70 after the Reserve Bank of New Zealand said it would halt purchase of government bonds this month as the economy rebounds from the shock of coronavirus.

Write to Joe Wallace at [email protected]

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Stock Futures Rise, Bitcoin Regains Some Ground After Multi-Month Lows


U.S. stock futures rose and bond yields crept lower as investors grew more comfortable with the inflation outlook and the pace of the economic recovery.

Futures tied to the S&P 500 added 0.5%, pointing to a positive start to the week after the broad-market index fell moderately for two weeks in a row. Nasdaq-100 futures rose 0.7%, suggesting gains for technology stocks after the opening bell.

Investors are keeping a close eye on inflation indicators to determine whether a rise in prices will be temporary or longer-term. Companies that are able to pass along higher costs to consumers such as in energy and materials have been an increasingly popular trade, while technology companies’ shares and bonds have lagged.

“Inflation concerns have lessened, there’s more of a wider recognition that inflation will be transitory,” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “This is reflecting the fact that we hit the fastest part of the recovery. Growth, while continuing, is going to be at a decelerating pace.”

In bond markets, the yield on the benchmark 10-year Treasury note declined to 1.618% Monday from 1.629% Friday. Yields fall when prices rise.

Cryptocurrencies continued a dramatic stretch of trading. Bitcoin regained some ground after touching multi-month lows Sunday and traded around $36,450, a 3.4% rise from Friday at 5 p.m. ET. The cryptocurrency has lost over 40% of its value since its mid-April peak.

“Decentralized finance is facing its first real challenge since inception. We don’t think that this is the end, the bubble has not really popped yet,” said Monica Defend, global head of research at Amundi. “Central banks are ready to play in the digital currency field, I expect with the central banks in play, there will be more regulation to come and more transparency.”

The Chicago Fed National Activity Index, which is seen as a gauge of economic activity and inflationary pressure, will be published at 8:30 a.m. ET.

Federal Reserve Gov. Lael Brainard will be speaking about digital currencies at a virtual event organized by CoinDesk at 9 a.m.

Earnings season is winding down. This week, technology companies including

Nvidia

on Wednesday and

Salesforce.com

and Dell Technologies on Thursday, are set to report.

In premarket trading, Moderna rose 2.2% after striking a deal with

Samsung’s

biotech division to manufacture its Covid-19 vaccines in South Korea.

In commodities, global benchmark Brent crude rose 1.8% to $67.65 a barrel. Analysts at

Goldman Sachs

put out a note on Sunday with a forecast that it will reach $80 by summer.

“It’s still kind of punching in the green light for inflation flows into commodities,” said Gregory Shearer, a commodities analyst at JPMorgan. But the Federal Reserve minutes last week, “where they began to talk about tapering, this makes people somewhat less concerned about [inflation] running away out of hand.”

Overseas, the pan-continental Stoxx Europe 600 was relatively flat, wavering between small gains and losses. Monday is a public holiday in several European countries, including Germany and Denmark.

Among European equities, IT services company Solutions 30 plunged over 70% after auditor EY declined to sign off on its accounts.

In Asia, major benchmarks were mixed. The Shanghai Composite Index advanced 0.3% while Hong Kong’s Hang Seng Index slipped 0.2%.

Investors are growing more comfortable with the inflation outlook.



Photo:

Courtney Crow/Associated Press

Write to Anna Hirtenstein at [email protected]

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Stock Futures Tick Up Ahead of Economic Data


U.S. stock futures edged up Friday ahead of fresh data on manufacturing and services sectors that will provide more insights into the pace of the economic recovery.

Futures tied to the S&P 500 ticked up 0.3%, suggesting that the broad market gauge may end the week on a tepid note after dropping 0.4% by the close on Thursday. Nasdaq-100 futures edged 0.2% higher Friday, pointing to big technology stocks sealing their best week since mid April.

Stocks have ground lower this week on mounting concern that inflation will rise and remain elevated as the economy rebounds. Sentiment reversed on Thursday after initial jobless claims, seen as a proxy for layoffs, fell to a new pandemic low. Investors have poured back into risky assets including growth stocks and cryptocurrencies, prompting prices to rebound from the week’s lows.

“There was some relief that the labor market recovery is under way in the U.S. and we’re seeing some nervousness about inflation ebbing away,” said

Kiran Ganesh,

a multiasset strategist at UBS Global Wealth Management.

Some money managers are betting that some sectors—such as banking and energy—could benefit in particular as the economy rebounds to pre-pandemic levels.

“If we can get a combination of confidence that inflation is under control, and signs of economic momentum coming through, I think there is still good opportunities to be had, in the reopening type of sectors in particular,” Mr. Ganesh said. Stocks that performed poorly during the pandemic could become the new drivers that lead major indexes higher, he added.

Ahead of the market opening, oat-milk maker Oatly rose over 10%. The shares jumped 19% in their trading debut on Thursday.

Preliminary surveys of purchasing managers, due to be released at 9:45 a.m. ET, are expected to show that the U.S. manufacturing and services industries expanded in May.

In bond markets, the yield on the benchmark 10-year Treasury note ticked down to 1.639%, from 1.631% on Thursday.

Bitcoin edged up 2% from its 5 p.m. ET price, trading at about $40,900. The digital asset has rebounded sharply from its Wednesday intraday low of $30,444.93, but is still down over 18% since 5 p.m. last Friday.

“The context of this week is that markets are tired,” said

Paul O’Connor,

head of a multiasset team at Janus Henderson. “Stocks keep losing momentum, speculative areas of the market are losing momentum. There is fatigue here.”

Surveys of purchasing managers across Europe showed that manufacturing and services activity increased in the eurozone this month. The pan-continental Stoxx Europe 600 edged up 0.5%.

In Asia, major benchmarks were mixed by the close of trading. The Shanghai Composite Index declined 0.6% while Japan’s Nikkei 225 advanced 0.8%.

Traders worked on the floor of the New York Stock Exchange on Thursday.



Photo:

Courtney Crow/Associated Press

Write to Anna Hirtenstein at [email protected]

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Stock Futures Edge Down After S&P 500 Hits Record


U.S. stock futures edged lower Friday as investors assessed fresh waves of Covid-19 infections globally that could hamper global supply chains and drive up inflation.

Futures tied to the S&P 500 ticked down almost 0.3%, a day after it closed at a record. The broad market index remains on track for its best month since November. Nasdaq-100 futures declined 0.3%, suggesting that technology shares may be among the weakest performers after the opening bell.

Rising Covid-19 cases in Brazil and India and signs of weakening in China’s manufacturing sector are sapping some of the optimism that took the major indexes up to all-time highs earlier in the week. New variants are threatening to hobble global travel, convulse supply chains further and slow the recovery, investors say.

Signs that the U.S. growth is accelerating are also stoking concern that inflation may rise too much, driven by a persistent shortage of products like electronic chips and the prospect of more fiscal stimulus flooding markets. Persistent inflation can erode portfolio returns.

“That is where the market is, wrestling between those two,” said Edward Park, chief investment officer at Brooks Macdonald.

If the supply constraints and inflationary factors extend into next year, “the growth parts of the markets, which are supported by this ultra cheap money environment, will struggle,” he added.

New economic data from China weighed on sentiment, with official gauges for manufacturing falling short of expectations in April. China’s statistics bureau said global chip shortages, international logistics jams and rising delivery costs have weighed on factory operations.

Increased costs for businesses due to supply-chain issues could be passed on to consumers, boosting prices, investors said.

High cases of Covid-19 in India, Brazil and Japan have bolstered concerns that new variants could emerge and spread globally. A variant of the coronavirus first spotted in India has been detected in the U.S. and 18 other countries and territories. Another variant from Brazil that has been detected in more than 30 nations.

“The third wave is the big thing,” Mr. Park said. “The greater the case count, the greater the chance a new variant is created that unwinds a lot of the good work being done in the vaccine rollout program.”

In bond markets, optimism about U.S. growth prospects—stemming from better-than-expected corporate earnings, signs of the labor market’s recovery, and President Biden’s new $1.8 trillion spending proposal—have encouraged money managers to sell government bonds, considered the safest assets. There are also growing concerns that inflation could curtail the returns from fixed-income securities, and from stocks that are richly valued for their future cash flow.

The yield on the 10-year Treasury note ticked up to 1.645% from 1.639% Thursday, and is poised to extend its advance for five of the past six days. Yields rise when prices fall.

“You’re seeing a lot of companies reporting pricing pressures, supply chain disruptions, coupled with all this extra stimulus coming through from the U.S. that is why people are now really starting to focus on inflation,” said Edward Smith, head of asset allocation research at U.K. investment firm Rathbone Investment Management. “Persistent inflation beyond spring is the biggest risk to markets this year, because it could cause the Fed to taper and hike interest rates sooner than expected.”

Investors are likely to continue monitoring earnings, with energy giants

Chevron

and

Exxon Mobil

set to disclose results before the opening bell.

Fresh figures on U.S. consumer spending, due at 8:30 a.m. ET, are expected to show a rebound in March. Economists anticipate that Americans boosted spending as warmer weather and the vaccine rollout encouraged people to spend stimulus checks and savings.

Overseas, the pan-continental Stoxx Europe 600 edged 0.1% higher.

Most major indexes in Asia declined by the close of trading. Hong Kong’s Hang Seng shed almost 2%. The Shanghai Composite Index, South Korea’s Kospi and Japan’s Nikkei 225 each fell 0.8%.

Endeavor CEO Ariel Emanuel, fourth left, rang the New York Stock Exchange opening bell on Thursday to celebrate his company’s IPO.



Photo:

Courtney Crow/Associated Press

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Stock Futures Waver Amid Rising Covid-19 Cases


U.S. stock futures wobbled Wednesday as an increase in global Covid-19 infection levels led to concerns about the pace of economic recovery.

Futures tied to the S&P 500 and the Dow Jones Industrial Average wavered between gains and losses after two straight days of declines. Technology-heavy Nasdaq-100 futures slid 0.3%.

A new wave of Covid-19 infections is sweeping through a number of countries including India and Japan, raising the prospect of fresh hurdles to the anticipated global economic rebound. Health authorities are also warning that new variants may emerge that are resistant to the existing batch of coronavirus vaccines. Given those concerns, investors are putting the brakes to what has been a furious rally in stocks in recent weeks, leaving the major indexes hovering near record highs.

“There are still risks in this market, particularly as it relates to the vaccine rollout and virus mutations,” said Shoqat Bunglawala, head of international multiasset investments at Goldman Sachs Asset Management. “We’re still likely to be in an environment with some volatility.”

Investors are also closely monitoring corporate earnings to see if the current valuations of expensive stocks can be justified.

Verizon Communications

and

NextEra Energy

are among a string of companies scheduled to report quarterly results before the market opens.

Chipotle Mexican Grill

will post earnings after the New York closing bell.

“We expect earnings to surprise on the upside, but the risks are asymmetric. In an environment where markets are at record highs, any company that doesn’t deliver is really punished,” said

Luca Paolini,

chief strategist at Pictet Asset Management. “Over the next few months the direction of earnings will determine the direction of the market.”

The retreat in U.S. stocks this week is simply a “normal pause” in a bull market, with investors taking the opportunity to book profits and reassess their risk appetite, Mr. Paolini said. “As long as the U.S. economy is strong, it’s not really worth the risk of betting against the equity market.”

Ahead of the market open, shares in

Netflix

fell almost 8% after the streaming giant said subscriber growth for the first quarter was weaker than expected.

In bond markets, the 10-year U.S. Treasury yield edged up to 1.575%, from 1.562% on Tuesday. Yields rise as prices fall.

Overseas, the pan-continental Stoxx Europe 600 climbed 0.5% after its biggest one-day drop since late December.

In Asia, most major stock indexes closed lower. Japan’s Nikkei 225 fell 2%, while Hong Kong’s Hang Seng declined 1.8%. The Shanghai Composite Index ended the day relatively flat.

Investors are looking to results to gauge whether high equity valuations are justified.



Photo:

Courtney Crow/Associated Press

Write to Caitlin Ostroff at [email protected]

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Stocks Drop Amid Powell’s Testimony


U.S. stocks edged down Tuesday as investors digested testimony by Federal Reserve Chairman Jerome Powell about the U.S. economy.

The S&P 500 ticked down 0.8% as of the 4 p.m. close of trading in New York. The Nasdaq Composite fell 1.1%, while the Dow Jones Industrial Average fell 0.9%.

Mr. Powell, in a joint appearance with Treasury Secretary Janet Yellen, reiterated in a congressional hearing that the central bank will continue providing support to the economy through loose monetary policy. Mr. Powell also said he doesn’t expect the $1.9 trillion stimulus package will lead to an increase in inflation, but he emphasized that the central bank has tools to deal with rising price pressures if necessary.

Investors are also reassessing their expectations for a fast and widespread global recovery, which had led to rising bets earlier this year that companies sensitive to an economic recovery would benefit. Rising Covid-19 cases in Europe and recent extensions to lockdowns in Germany, France and Italy are also weighing on sentiment.

“It feels like the reflation theme is running into a few roadblocks,” said Sebastian Mackay, a multiasset fund manager at Invesco. “We are probably in a cyclical recovery, but we may have gotten ahead of ourselves. This is a pause for thought: how rapid is this recovery actually going to be?”



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Stocks Turn Higher After Fed Holds Steady


U.S. stocks rose Wednesday after the Federal Reserve vowed to keep its easy-money policies in place until the U.S. economy further recovers from the effects of the Covid-19 pandemic.

The S&P 500 added 0.3%, and the Dow Jones Industrial Average climbed 0.6%. The tech-heavy Nasdaq Composite advanced 0.4%, reversing losses earlier in the session.

All three indexes turned higher at the release of the central bank’s 2 p.m. ET statement. Investors are focused on any sign the monetary stimulus that has supported markets during the pandemic could begin to subside.

With unemployment still elevated, Fed officials are taking a cautious approach that supports the economy, said

George Catrambone,

head of Americas trading at asset manager DWS Group,

“Investors are taking some solace in that,” he said. “We’re going to make sure it’s there, that the recovery is sustainable and inflation is sustainable, before we really think about raising rates.”

The Fed also highlighted the brightening outlook for growth. Investors in recent weeks have trimmed bets on the technology stocks that soared earlier in the pandemic while adding shares of economically sensitive companies that should do well as the vaccine rollout progresses and more fiscal stimulus enters the financial system.

Shares of

Apple

and

Amazon.com

are down 5.6% and 3.1% this year, respectively, while the energy and financial sectors are leading the S&P 500.

“Tech is the funding source for reallocation,” said

Jamie Cox,

managing partner for Harris Financial Group. “You’re restoring the allocations that you had pre-pandemic.”

Money managers have started pricing in a rise in inflation, leading to a selloff in government bonds, and are betting that interest rates will start climbing by the end of next year. They have started exiting stocks that look to be too richly valued after last year’s rally.

“Markets across the board are expensive today, and that is pinned on central-bank support,” said

Hugh Gimber,

a strategist at J.P. Morgan Asset Management. “So this whole market is very, very sensitive to changes in central-bank policy.”

After the Fed’s reassurance that interest rates will stay low, shares of rapidly growing companies rebounded from earlier losses. The Russell 1000 Growth Index was recently up 0.3%, trailing a 0.4% gain by the Russell 1000 Value Index. Value stocks—which trade at low multiples of their book value, or net worth—have outperformed growth stocks in recent weeks.

“The resurgence of value investing has been the big story of the year,” said

Mace McCain,

chief investment officer at Frost Investment Advisors, noting that the rollout of coronavirus vaccines should help the economic recovery. “We expect tremendous growth this next year.”

In bond markets, the yield on the benchmark 10-year U.S. Treasury note rose to 1.641%, from 1.622% Tuesday. Yields rise as the price falls. The yield has climbed sharply from this year’s low of 0.915% on Jan. 4.

Traders worked on the floor of the New York Stock Exchange on Tuesday.



Photo:

Colin Ziemer/Associated Press

Among individual stocks,

NRG Energy

fell 17%. The company said it is withdrawing its 2021 financial guidance after the recent winter storm hit its results. Shares of

Plug Power

dropped 8% after the hydrogen and fuel-cell technology company said it would restate financial statements.

Brent crude, the international benchmark for oil, fell 0.6% to $68.00 a barrel.

In overseas markets, the Stoxx Europe 600 edged 0.4% lower. Most major indexes in Asia were little changed. South Korea’s Kospi index fell 0.6%, while the Shanghai Composite, Hang Seng and Nikkei 225 indexes all ended the day nearly flat.

Write to Karen Langley at [email protected] and Will Horner at [email protected]

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Stock Futures Mixed After Record-Setting Rally


U.S. stock futures were mixed Friday, with the technology sector poised to decline and the Dow Jones Industrial Average on track to notch a fresh record.

Futures tied to the S&P 500 edged down 0.3%, pointing to a decline after the opening bell. The broad-market index closed at an all-time high record on Thursday. Contracts linked to the Dow ticked up 0.2% in choppy trading. The blue-chips index had also closed at a record.

Stocks have broadly rallied this week following a rebound in technology shares and growing appetite for sectors like banking and energy that may benefit from the economy rebounding. On Friday, money managers again pulled funds from government bonds as their appetite for the safest assets waned. That sent yields ticking up and sapped demand for richly valued tech shares.

Prospects for the economy have brightened with President Biden signing the $1.9 trillion fiscal stimulus package on Thursday. He also said every adult in the U.S. will be able to get a vaccine by May 1. The moves are expected to accelerate the reopening and spur growth.

“Markets will take a break after all the news we had yesterday,” said Sophie Chardon, a cross-asset strategist at Lombard Odier. “This all points to the fact that we are in a recovery, especially given all the substantial policy support both on the fiscal and monetary fronts.”

Futures tied to the Nasdaq-100 index dropped 1.2% on Friday. The tech-heavy index ended Thursday up over 3% for the week, following three weeks of declines.

“We haven’t been advocating for a major move out of growth stocks,” said David Stubbs, global head of investment strategy at J.P. Morgan Private Bank. “We’ve seen the permanent adoption of many digital technologies, from this shift from the real world to the digital world. I don’t think that shift will reverse.”

His company is also buying financial and industrial stocks, expecting them to benefit from the recovery because they are economically-sensitive sectors.

The yield on the benchmark 10-year Treasury note rose to 1.614%, before easing to 1.590%. That is still up from 1.525% on Thursday.

“The bigger picture is, vaccines are going to create a sustainable reopening. That is what the market is reacting to,” Mr. Stubbs said. “You’re seeing a rapid reassessment of the macro environment.”

Ahead of the market open, megacap tech stocks including Apple, Microsoft, Alphabet and

Amazon.com

declined. Tesla shed over 3% premarket.

Fresh data on U.S. consumer sentiment will be out at 10 a.m. ET. The University of Michigan’s preliminary reading for March is expected to show an uptick in confidence amid the vaccination rollout and job gains.

Bitcoin climbed to a record high, topping $58,700 in overnight trading. It has since pulled back about 5% to around $55,900.

Overseas, the pan-continental Stoxx Europe 600 slipped 0.4%.

Among European equities,

Burberry

rose over 6% after the luxury goods maker said it expects its revenue and a measure of profit to be above analysts’ expectations for the 2021 fiscal year.

In Asia, most major benchmarks closed higher. The Shanghai Composite Index added 0.5% and Japan’s Nikkei 225 rose 1.7%. Hong Kong’s Hang Seng Index dropped 2.2%.

A banner for South Korea’s Coupang adorned the New York Stock Exchange facade before the company’s IPO on Thursday.



Photo:

Courtney Crow/Associated Press

Write to Anna Hirtenstein at [email protected]

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Dow Slips Amid New Travel Curbs


The index of blue-chip stocks fell 200.94 points, or 0.7%, to 30015.51, marking its largest one-day point and percentage decline in December. The S&P 500 slid 7.66 points, or 0.2%, to 3687.26 to extend its losing streak to a third session.

The tech-heavy Nasdaq Composite, in contrast, rose 65.40 points, or 0.5%, to 12807.92, a new all-time high.

Much of the stock market has lost steam this week as some nations began taking steps to curtail travel in an effort to contain the emergence of a fast-spreading variant of coronavirus from England. The U.K. imposed stringent restrictions on social and business activity, prompting concern that more countries may be required to adopt measures that would hamper the global economic recovery.

“It would be a brave man to suggest this will just remain a U.K.-specific issue,” said

Derek Halpenny,

head of research for global markets in the European region at MUFG Bank. “Are we going back into another phase of more pronounced global lockdowns again?”

Oil prices slipped for a second day amid growing worries over the new restrictions imposed on travelers from the U.K. to other countries. Brent crude futures, the benchmark in international energy markets, dropped 1.6% to $50.08 a barrel.

Meanwhile, the yield on the 10-year note ticked down to 0.917%, from 0.941% Monday, as some investors looked to the relative safety of U.S. government bonds. Yields fall when prices rise.

Investors are trying to gauge whether the new strain of Covid-19 will impact the efficacy of vaccines that are being rolled out this month.

BioNTech

Chief Executive

Ugur Sahin

said the vaccine developed by his company, in partnership with

Pfizer,

would likely work against the new variant and is being tested. If a new mutation would make the current vaccine ineffective, BioNTech can develop another tailored to the new variant in six weeks, he said.

Technology stocks traded higher on Nasdaq, in contrast to declines for the S&P and Dow.



Photo:

Michael Nagle/Bloomberg News

“The big unknown is to what degree could the new strain make the efficacy of the vaccine lower,” said

Peter Garnry,

head of equity strategy at Saxo Bank. “If it just turns out to be more infections, and it doesn’t have an effect on the vaccine, then the market will be less concerned.”

Late Monday, a fresh $900 billion fiscal stimulus package was passed by Congress, ending weeks of anticipation from investors about whether lawmakers could end their stalemate. The bill, which includes direct checks to households and relief for small businesses, is expected to be signed by

President Trump.

Even so, the bill’s passage wasn’t enough to propel the broader stock market higher.

“We’ve had the positive news on the vaccines and the fiscal deal, so there’s probably not a catalyst to drive stocks meaningfully higher in the next few weeks,” said

Brian Levitt,

global market strategist at Invesco.

When Is the Market on Holiday?

Select stock-market closures through year’s end

  • Thurs. Dec. 24: U.S. stock market closes at 1 p.m. ET
  • Fri. Dec. 25: Markets closed
  • Mon. Dec. 28: London stock market closed
  • Fri. Jan. 1: Markets closed

Still, Mr. Levitt noted that he maintains a positive outlook on equities.

“In my opinion, betting against stocks over the next year and beyond is betting against medicine, science and policy makers,” he said. “And I’m not willing to make those bets.”

In corporate news,

Apple

rose $3.65, or 2.9%, to $131.88 after Reuters reported that the iPhone maker intends to move forward with its own self-driving car technology.

Exercise-equipment maker

Peloton Interactive

gained $16.82, or 12%, to $161.21, hitting a new all-time-high, after it agreed to buy commercial fitness-equipment provider Precor for $420 million in cash.

Travel stocks and shares of energy companies tumbled.

Norwegian Cruise Line Holdings

slid $1.70, or 6.9%, to $23.08.

Chevron

fell for an eighth consecutive day, losing $1.73, or 2%, to $84.36. That marks the longest losing streak for the oil giant since October 2013.

Meanwhile,

Tesla

tumbled $9.52, or 1.5%, to $640.34, extending its losses for the week to nearly 8%. The electric-car maker made its S&P 500 debut Monday.

Moves in stocks could be big and markets may be especially choppy in coming days because fewer people are trading as the holiday period starts, said

Salman Ahmed,

global head of macro at Fidelity International.

The final stretch of trading in December is historically positive for the stock market. But this week’s losses may be a sign that investors are starting to take profits after a blockbuster year, especially as they consider the possibility of tax changes after President-elect

Joe Biden

takes office, said

JJ Kinahan,

chief market strategist at TD Ameritrade. The S&P 500 is up 14% in 2020, and the Nasdaq Composite has catapulted 43% higher.

Footage shows empty supermarket shelves while trucks bearing cargo get stuck at the border after France imposed a travel ban on Britain following the spread of a new coronavirus strain. Other countries have also barred passengers from the U.K. Photo: Neil Hall/EPA/Shutterstock

Additionally, Mr. Kinahan noted, Tuesday’s worse-than-expected consumer confidence report may also be weighing on markets.

The Conference Board, a private research group, said its index of consumer confidence dropped to 88.6 in the first two weeks of December, from a revised 92.9 in November. Economists surveyed by The Wall Street Journal had expected a level of 97.5.

Still, there were small signs of optimism. Data from the Commerce Department showed Tuesday that U.S. gross domestic product—the value of all goods and services produced across the economy—increased at an annualized rate of 33.4% in the third quarter, slightly stronger than the previous estimate issued last month.

Overseas, European shares rebounded after Monday’s losses. The pan-continental Stoxx Europe 600 gained 1.2%.

Major stock indexes in Asia closed lower. China’s Shanghai Composite fell 1.9%, and South Korea’s Kospi declined 1.6%.

Write to Caitlin Ostroff at [email protected] and Caitlin McCabe at [email protected]

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