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Wall Street’s big rally taps the brakes; most US stocks slip

In this photo provided by the New York Stock Exchange, traders work on the floor, Monday, Dec. 7, 2020. U.S. stocks are taking a pause from their big recent rally, and most stocks on Wall Street are edging lower Monday following mixed and mostly muted movements for markets overseas. (Colin Ziemer/New York Stock Exchange via AP)

NEW YORK (AP) — U.S. stocks are taking a pause from their big recent rally, and most stocks on Wall Street are edging lower Monday following mixed and mostly muted movements for markets overseas.

The S&P 500 was 0.1% lower in afternoon trading. The Dow Jones Industrial Average was down 191 points, or 0.6%, at 30,026, as of 1:18 p.m. Eastern time, and the Nasdaq composite was 0.3% higher.

Stocks that would benefit most from a reopening, healthier economy were taking some of the sharper losses, giving back some of their big recent gains. Energy stocks in the S&P 500 were down 2.1% after their 16.8% surge in November, for example. Bank stocks were also weaker than the rest of the market, and roughly two-thirds of stocks in the S&P 500 were lower.

Technology companies, whose profits have proven more resistant to the pandemic’s effect on the economy, were holding steadier. Apple was up 1.3%.

It’s a flip of the market’s recent momentum and a callback to how it was trading earlier this year, before enthusiasm burst higher in November that one or more COVID-19 vaccines will get the global economy closer to normal next year.

“It gave us all some hope and hope is a pretty good ingredient for the markets,” said Frank Panayotou, managing director at UBS Private Wealth Management.

And while the markets are likely in good shape for the medium or long-term, he said, investors can expect some choppiness as the the virus’ impact continues ahead of vaccines reaching people next year.

In Europe, stocks were subdued, and the value of the British pound was sinking as negotiators in the United Kingdom’s exit from the European Union seemed to remain stuck on the same issues that have prevented a deal for months.

Such political concerns are helping to slow momentum for financial markets around the world, as is the troubling rise in coronavirus counts and deaths across much of the United States and Europe. The worsening pandemic is pushing governments around the world to bring back varying degrees restrictions on businesses, keeping customers away from businesses and threatening to drag down the economy through what’s expected to be a bleak winter. Job growth in the United States slowed sharply last month, a report on Friday showed, and the numbers may get only worse.

That’s helped dent the powerful and weekslong run for markets around the world. The S&P 500 had one of its best months in decades during November and added more to it last week, in large part because of the vaccine optimism. Hope has also built that Washington may be able to get past its partisanship to deliver some form of financial aid for the still-struggling economy in the meantime.

If Congress fails to reach a deal to carry the economy through the winter, stocks could be set up for more declines. Chevron Corp. fell 2.7% amid worries that the worsening pandemic could choke off more demand for oil and energy.

Other companies whose profits desperately need the economy to improve and the world to get closer to normal were also leading the market lower. Mall owner Simon Property Group dropped 5.1%, Olive Garden-owner Darden Restaurants fell 2.9% and airline operator Alaska Air Group lost 3.7%.

In Europe, France’s CAC 40 was down 0.6%, Germany’s DAX lost 0.2% and the FTSE 100 in London rose 0.1% as one of the most intense days in the long-running Brexit trade negotiations showed no visible progress.

In Asia, markets were mixed as relations between the United States and China, the world’s two largest economies, remain tense.

Hong Kong’s Hang Seng dropped 1.2%, and stocks in Shanghai sank 0.8%. Japan’s Nikkei 225 fell 0.8%, and South Korea’s Kospi gained 0.5%.

The yield on the 10-year Treasury fell to 0.93% from 0.96% late Friday.

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AP Business Writer Elaine Kurtenbach contributed.

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