A woman wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Friday, Dec. 11, 2020. Asian stock markets were mixed Friday after Wall Street sank following signs damage to the U.S. economy from the coronavirus is worsening while Congress is deadlocked over possible new aid. (AP Photo/Kin Cheung) People wearing face masks walk past a bank's electronic board showing the Hong Kong share index in Hong Kong, Friday, Dec. 11, 2020. Asian stock markets were mixed Friday after Wall Street sank following signs damage to the U.S. economy from the coronavirus is worsening while Congress is deadlocked over possible new aid. (AP Photo/Kin Cheung) A man wearing a face mask walks past a bank's electronic board showing the Hong Kong share index in Hong Kong, Friday, Dec. 11, 2020. Asian stock markets were mixed Friday after Wall Street sank following signs damage to the U.S. economy from the coronavirus is worsening while Congress is deadlocked over possible new aid. (AP Photo/Kin Cheung) People wearing face masks walk past a bank's electronic board showing the Hong Kong share index in Hong Kong, Friday, Dec. 11, 2020. Asian stock markets were mixed Friday after Wall Street sank following signs damage to the U.S. economy from the coronavirus is worsening while Congress is deadlocked over possible new aid. (AP Photo/Kin Cheung) Brian Chesky, CEO of Airbnb, is shown on an electronic screen at the Nasdaq MarketSite, Thursday, Dec. 10, 2020, in New York. The San Francisco-based online vacation rental company holds its IPO Thursday. (AP Photo/Mark Lennihan) In this Nov. 16, 2020 file photo a man wearing a mask passes the New York Stock Exchange in New York. Time stood still for most of the world in 2020, as lockdown life had every day bleeding into the next. But for Wall Street, it’s been a year locked in at super fast-forward. The stock market tumbled through years’ worth of losses in just over a month this spring, only to turn around and pack an entire bull market’s worth of gains into less than nine months. (AP Photo/Mark Lennihan, File) The electronic screen at the Nasdaq MarketSite displays Airbnb co-founders Brian Chesky, left, and Nathan Blecharczyk, Thursday, Dec. 10, 2020, in New York. The San Francisco-based online vacation rental company holds its IPO Thursday. (AP Photo/Mark Lennihan) The electronic screen at the Nasdaq MarketSite displays an advertisement for Airbnb, Thursday, Dec. 10, 2020, in New York. The San Francisco-based online vacation rental company holds its IPO Thursday. (AP Photo/Mark Lennihan) In this Nov. 23, 2020 file photo, a street sign is displayed at the New York Stock Exchange in New York. U.S. stocks fell in morning trading Friday, Dec. 11, as prospects for another aid package from Washington faded while a surge in virus cases threatens to inflict more damage on an already battered economy. (AP Photo/Seth Wenig, File) In this photo provided by the New York Stock Exchange, traders Edward McCarthy, left, and Robert Charmak work on the floor during the Delwinds Insurance Acquisition Corp. IPO, Friday Dec. 11, 2020. U.S. stocks fell in morning trading Friday as prospects for another aid package from Washington faded while a surge in virus cases threatens to inflict more damage on an already battered economy. (Colin Ziemer/New York Stock Exchange via AP)
U.S. stock indexes pulled further away from their recent highs Friday as prospects for another aid package from Washington faded while a surge in virus cases threatens to inflict more damage on an already battered economy.
The S&P 500 slipped 0.1%, its third-straight decline since it set a record high on Tuesday. The benchmark index ended the week 1% lower after two weeks of solid gains. Losses in financial, technology, health care and other sectors outweighed gains in communication services stocks, industrial companies and elsewhere. Treasury yields fell broadly, a signal that traders were seeking to lessen their exposure to riskier holdings.
The latest bout of selling, which eased toward the end of the day, came as investors continue to hope for Washington to come through with another financial lifeline for people, businesses and state governments struggling as the coronavirus pandemic worsens. But an emerging $900 billion aid package from a bipartisan group of lawmakers has essentially collapsed because of continued partisan bickering.
“We still don't have a deal in Congress for a rescue package,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “If it doesn't happen, the market could struggle.”
The S&P 500 slipped 4.64 points to 3,663.46. The index had been down 34 points in the early going. The Dow Jones Industrial Average got a boost from Disney, which hit a new high. The index rose 47.11 points, or 0.2%, to 30,046.37. The tech-heavy Nasdaq lost 27.94 points, or 0.2%, to 12,377.87.
Small company stocks, which have been making solid gains this month, also fell. The Russell 2000 small-cap index gave up 11.01 points, or 0.6%, to 1,911.70.
Technology companies and banks led the decline. Apple fell 0.7% and Bank of America dropped 1.9%.
Disney jumped 13.6%, a record high and the biggest gain in the S&P 500, after giving investors an encouraging update on subscriber growth and future plans for its Disney Plus streaming service.
Stocks have been climbing over the last few weeks as advances in vaccine development raised hopes that the pandemic could be tamed in the coming months and set the global economy on a path to normalcy.
“The excitement over the vaccine has already been priced in and the market is fairly overbought, based on where we are in the economy right now,” said Kenny Polcari, managing partner at Kace Capital Advisors.
The U.K. has already started vaccinating people with Pfizer and BioNTech’s vaccine. On Friday, the Food and Drug Administration authorized an emergency rollout of that vaccine, with shots for health workers and nursing home residents expected to begin in the coming days.
Widespread vaccination will take months and the virus pandemic is prompting tighter restrictions on businesses. An already slow economic recovery appears to be stalling in the wake of the latest surge and unemployment is rising.
Polcari said markets are simply churning and consolidating following a strong November and he expects that to continue through December as stimulus talks continue. Wall Street is also waiting for a special election in Georgia in early January, which could potentially switch the balance of power in the U.S. Senate.
European stocks slipped over the increased possibility that the U.K. and the European Union will fail to strike a deal on a new economic relationship heading into next year. Britain left the EU on Jan. 31 but has continued to follow the trading bloc’s rules during a transition period that lasts until the end of the year. A no-deal split would bring overnight tariffs and other economic barriers that would hurt both sides.
The yield on the 10-year Treasury held steady at 0.89%.
European markets ended lower, while Asian markets closed mixed.
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