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Wall Street Opens Mixed as Novel Virus Continues to Weigh; Dow Down 140 Pts

Published 22/12/2020, 14:39
Updated 22/12/2020, 14:57
© Reuters.

© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened mixed on Tuesday, with the discovery of a new strain of the Covid-19 virus - and all that that may imply for fresh restrictions on the economy in the new year - continued to weigh on sentiment.

By 9:55 AM ET, the Dow Jones Industrial Average was down 142 points, or 0.5%, at 30,074 points, while the S&P 500 was roughly flat and the Nasdaq Composite - as usual when virus fears come to the front of investors' minds - outperforming with a 0.4% gain.

There was little reaction earlier to a small upward revision in U.S. third-quarter GDP data, which was also notable for personal consumer expenditures being revised down slightly from their first reading. The passage of the $900 billion fiscal relief package through Congress has also been thoroughly priced in, while existing home sales for November came in almost exactly as forecast at 6.69 million.

Among early movers, Apple (NASDAQ:AAPL) stock rose 4.3% after Reuters reported that it has revived its plans to develop all-electric, self-driving cars, after a couple of years in which it seemed the project had been put on the back burner.  Reuters reported that the company is planning to come to market with a mass product by 2024. Tesla (NASDAQ:TSLA), which would risk losing some of its unique cachet as a result of competition from one of the few companies with as much brand power, fell 1.4%. 

However, the biggest beneficiary of the story was QuantumScape stock, which rose 27% on the perception that Apple may be interested in using its solid-state batteries. Reuters' story had noted that Apple's change of heart had been triggered in part by a 'radical' advance in battery technology. 

Another big gainer was Peloton Interactive (NASDAQ:PTON) stock, which rose some 13.5% after the company said it had agreed to buy Precor, a rival maker of fitness equipment. The deal will help Peloton expand its manufacturing capacity, relieving a potential bottleneck after a year in which the pandemic has turbo-charged demand for its products.

As such, a deal that will cost Peloton $420 million has added over $3 billion to the company’s market value.

Elsewhere, CarMax (NYSE:KMX) stock fell 7.0% after the company reported a 1% drop in like-for-like used vehicle sales in the three months through November. The market was more upset by that than it was impressed by a comfortable beat on the bottom line.

And Moderna and Pfizer both suffered from a report in Science Magazine trying to explain the incidence of strong allergic reactions to their vaccines. The magazine hypothesized that nanoparticles of the chemical of polyethylene glycol, or PEG, may be responsible for the reactions. Moderna (NASDAQ:MRNA) stock fell 6.1%, while Pfizer (NYSE:PFE) stock fell 1.4% and BioNTech (NASDAQ:BNTX) stock fell 4.4%.

 

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