Wall Street drops as Covid-19 pandemic fears return

Wall Street tumbled on Thursday as US coronavirus infections surged and investors weighed the timeline for the mass rollout of an effective vaccine.

New York became the latest state to introduce stricter social distancing rules on Wednesday, as new infections in the country surged above 100,000 for an eighth consecutive day.

The blue-chip Dow was pulled down by industrial and financial companies sensitive to economic growth, with Boeing Co and Goldman Sachs each down almost 2%.

Airlines and cruise operators, among the hardest hit by the coronavirus pandemic, also fell. The S&P 1500 airline index fell 2.6%, while Royal Caribbean Cruises Ltd dropped 2.4% and Carnival Corp tumbled 6.2%.

Even after Thursday's drop, the S&P 500 has gained almost 2% this week, buoyed by positive vaccine trial data that increased expectations of a quick economic recovery. Stocks have also benefited from expectations that a divided Congress will keep President-elect Joe Biden from enacting tax hikes that would hurt corporate profits.

"The reality is that we don't know what the new normal is going to look like, even when we do recover from the coronavirus, and that is still a ways away," said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta.

"It’s the classic between the market discounting something that is nine to 12 months out, and then 'undiscounting' it because it has not happened yet."

New data showed U.S. jobless claims fell to a seven-month low last week, but the pace of job recovery slowed as fiscal stimulus waned and further improvement could be limited by a raging pandemic.

Amazon.com Inc and Apple dipped less than 1%, while keeping the Nasdaq negative.

The Dow Jones Industrial Average was down 1.24% at 29,031.8 points, while the S&P 500 lost 1.15% to 3,531.44.

The Nasdaq Composite dropped -0.65% to 11,709.71.

Among the biggest boosts to the Nasdaq was a 21% surge in the U.S.-listed shares of Chinese e-commerce company Pinduoduo Inc after it reported strong quarterly revenue.

Rival JD.com Inc's shares climbed 5%.

The S&P 500 energy index dropped 3% and financials fell 2.2%.

Moderna Inc added 5% after the drugmaker said it had enough data for a first interim analysis of the late-stage trial of its experimental COVID-19 vaccine. It did not say when it plans to release the data.

Walt Disney Co and network gear maker Cisco Systems Inc each slipped over 1% ahead of their quarterly results due after close.

Declining issues outnumbered advancing ones on the NYSE by a 2.84-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favored decliners.

The S&P 500 posted five new 52-week highs and no new lows; the Nasdaq Composite recorded 66 new highs and 11 new lows.