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S&P 500 closes lower in volatile session after new Covid strain causes U.K. to lock down

The S&P 500 strike down slightly in volatile trading on Monday to start the holiday week as enthusiasm over a coronavirus stimulus deal was nonplused by worries over a viral new Covid strain in the U.K.

The broad equity index dipped 0.4%, or 14.49 points, to 3,694.92 after fizzle out nearly 2% at its session low. The Nasdaq Composite fell 0.1%, or 13.12 points, to 12,742.52. The Dow Jones Industrial Undistinguished erased a 400-point loss to eke out a small gain as strength in Nike and bank shares supported the blue-chip benchmark. The 30-stock Dow arise 0.1%, or 37.40 points, to 30,216.45.

Nike popped nearly 5% to hit a record high on the back of strong earnings. Bank stockpiles jumped in unison with JPMorgan and Goldman up 3.8% and 6.1%, respectively, after the Federal Reserve announced it wish allow the industry to resume share buybacks in the first quarter of 2021.

Travel-related stocks initially fell sharply on rumour of an infectious new coronavirus strain in the U.K., which triggered more severe lockdowns and travel restrictions across Europe. In whatever way, some believe the concerns over the new virus variant could be overblown.

The U.K. strain “doesn’t seem to have mutated the outwardly proteins of the virus in a way that they would slip past our vaccines or prior immunity. In fact, we don’t think that that’s the proves,” Dr. Scott Gottlieb told CNBC’s “Squawk Box.” “But what this does suggest is that eventually this vaccine in all likelihood will evolve its surface proteins in a way that they won’t be recognized by the antibodies we have right now, and we will have to update our vaccines.”

Gottlieb claimed the Covid virus did not seem to be mutating its proteins as rapidly as the seasonal flu and estimated that vaccines would need to be updated involving every three years. 

Eli Lilly said Monday that its Covid antibody therapy “should maintain whole activity against the new strain” identified in the U.K.

Shares of airlines and cruise line operators closed well off their sitting lows. Norwegian finished the day 1.6% lower and Royal Caribbean dipped 0.7%. American Airlines fell 2.5% after slipping more than 5% earlier, while United Airlines dipped 1.5%. More than two-dozen states from Italy to India to El Salvador have banned flights from the U.K. or travelers who have been in the country.

Tesla left more than 6% as it entered the S&P 500 with a 1.69% weighting in the index, the fifth largest. The stock hew down to its session following a report that Apple is moving forward with its plan to produce electric vehicles.

Monday’s choppy trading report ined as lawmakers reached an agreement on a $900 billion relief package, which would provide direct payments and jobless aid to twisting Americans. The announcement came after negotiators resolved a key sticking point by rolling back the Federal Reserve’s crisis lending powers.

Treasury Secretary Steven Mnuchin told CNBC’s “Squawk Box” that the stimulus money liking go out as soon as next week. Lawmakers will vote on the relief and funding bill on Monday.

Now with a stimulus combine agreed upon, investors may also be seeking to lock in profits after an unexpected banner year. With unimaginative than two trading weeks left in 2020, the S&P 500 is up 14.4% for the year, while the 30-stock Dow has risen 5.9%. The Nasdaq Composite has met 42.0% this year as investors favored high-growth technology companies.

The major averages hit record highs recently centre of optimism toward fresh coronavirus stimulus as well as the vaccine rollout. Moderna is shipping its first batch of vaccine quantities after receiving approval for emergency use from the U.S. Food and Drug Administration. Meanwhile, the vaccine by Pfizer and BioNTech is being strewed to front-line health-care workers around the country.

“Covid mutations are a reality, and there is at least some disappointment about what’s actually in the stimulus deal, which means we may see this translate into volatility as we narrow in on the end of 2020,” revealed Chris Larkin, managing director of trading and investing product at E-Trade.

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