S&P 500, Dow drop from record levels as coronavirus cases spike

Wall Street's main indexes fell on Tuesday with the S&P 500 and the Dow retreating from record closing highs hit a day earlier, following disappointing retail sales data and a spike in coronavirus cases across the country.

The Nasdaq's losses were limited by a 12% jump in Tesla Inc's shares in anticipation of a $51 billion trade by index funds adjusting their holdings when the electric-car maker will be added to the benchmark S&P 500 in December.

The Dow notched an all-time closing high on Monday, finishing about 50 points shy of 30,000 after Moderna Inc's promising COVID-19 vaccine data boosted hopes of an economic recovery, overshadowing spiking coronavirus cases across the country.

"There is conflict for the market between the near-term direction to the economy, which is troubled with the very high COVID-19 rates and the future for the market, that's which vaccines could provide an end to the restrictions," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

New Jersey, California and Iowa imposed fresh restrictions as the pandemic reached its most perilous point yet in the United States, threatening to worsen as the colder weather sets in.

Latest data showed US retail sales increased less than expected in October and could slow further due to spiraling new infections and a lack of fiscal support.

At 09:51 a.m. ET the Dow Jones Industrial Average fell 351.42 points, or 1.17%, to 29,599.02, the S&P 500 lost 30.11 points, or 0.83%, to 3,596.80 and the Nasdaq Composite lost 53.51 points, or 0.45%, to 11,870.62.

Financials, industrials and energy stocks gave back some gains made over the last week as positive updates from U.S. vaccine trials encouraged investors to diversify into value stocks on hopes they will benefit from a pickup in the economy.

Amazon.com Inc rose 1.2% after it launched an online pharmacy for delivering prescription medications in the United States. Drug retailers such as Walgreens Boots Alliance Inc tumbled 8.7%, while CVS Health Corp fell 7.5% on the news.

Warren Buffett's Berkshire Hathaway Inc disclosed new stakes worth $5.7 billion in drugmakers Abbvie Inc, Bristol-Myers Squibb Co, Merck & Co and Pfizer Inc, lifting their shares between 1.4% and 2.4%.

Retail earnings is in focus this week as the third-quarter earnings season enters its tail end. Walmart Inc posted a bigger-than-expected increase in quarterly same-store sales. However, its shares fell 0.8% after rallying 28% this year.

Declining issues outnumbered advancers by 3.4-to-1 on the NYSE; on Nasdaq, a 0.3-to-1 ratio favored decliners.

The S&P 500 posted seven new 52-week highs and no new low, while the Nasdaq Composite recorded 49 new highs and three new lows.