Stock market news live updates: Stocks sink as concerns over new virus strain in UK, restrictions weigh

Stocks pared losses on Monday as concerns mounted over a new infectious strain of the coronavirus identified in the UK.

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The Dow turned positive and gained more than 50 points, or 0.2%, after dropping more than 400 points, or 1.4%, at session lows. The S&P 500 and Nasdaq were still negative Monday afternoon, however, and stocks poised to benefit from an economic reopening – including airlines, cruise lines and lodging firms – fell sharply, unwinding some of the gains made over the past month amid rising vaccine optimism. The CBOE Volatility Index (^VIX) briefly spiked above 30 for the first time in five weeks.

Populous parts of the UK including London went back into a more draconian state of lockdown over the weekend, after the discovery of a new variant of COVID-19 said by experts to be 70% more transmittable than the earlier version of the virus in the country. The UK’s FTSE 100 index (^FTSE) sank 1.7%, and the pound fell 1.9% again the dollar (GBPUSD=X) Monday morning in New York before paring losses.

More than two dozen countries have imposed travel bans on the UK over the past couple days, with the duration of the restrictions spanning from days to months. Some key countries, including France, banned both travel and freight to and from the country, leading to possible food shortages in Britain ahead of the Christmas holiday.

The new developments around COVID-19 at least temporarily outweighed more upbeat news on the political front in the U.S. on Sunday, as lawmakers reached a deal for a $900 billion virus-relief package and government spending package for the fiscal year. This ended a months-long stalemate over more relief among congressional lawmakers and White House officials, with discussions over the package accelerating this month as a year-end expiration of key unemployment programs drew near.

The stimulus package will include another round of direct checks to Americans of $600, enhanced federal unemployment benefits of $300 per week, and funds for small businesses and vaccine distribution. Some of the more contentious points of earlier stimulus negotiations – including state and local government aid and liability protections for businesses – were omitted from this deal.

“For quite some time now a stimulus deal has appeared to be the market’s primary psychological driver. And last week’s less-than-stellar economic data may have encouraged bulls—the logic being that Congress was prompted to get a deal done,” Chris Larkin, managing director of trading and investing product for E-Trade Financial, said in an email Monday morning. “But with stimulus now mostly in the rearview, traders are likely looking for the next market mover. COVID mutations are a reality, and there is at least some disappointment around what’s actually in the stimulus deal, which means we may see this translate into volatility as we narrow in on the end of 2020.”

The House of Representatives is poised to vote on the virus-relief package Monday before sending it to the Senate.

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1:37 p.m. ET: Stocks cut losses as session rolls on, Dow turns positive

Here were the main moves in markets, as of 1:37 p.m. ET:

  • S&P 500 (^GSPC): -14.96 points (-0.4%) to 3,694.26

  • Dow (^DJI): +49.34 points (+0.16%) to 30,228.39

  • Nasdaq (^IXIC): -26.48 points (-0.21%) to 12,729.29

  • Crude (CL=F): -$1.62 (-3.3%) to $47.48 a barrel

  • Gold (GC=F): -$8.20 (-0.43%) to $1,880.70 per ounce

  • 10-year Treasury (^TNX): -1.2 bps to yield 0.936%

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10:45 a.m. ET: Tesla shares drop on first day in S&P 500

Tesla (TSLA) shares fell as much as 6.3% Monday morning in the stock’s first day as part of the S&P 500.

Shares of the electric car-maker endured a volatile ride in the last hour of trading on Friday, as money managers prepared to add tens of billions of dollars worth of the company’s stock into their index funds. With a market capitalization well over $600 billion, Tesla was the largest-ever company to be added to the S&P 500, and ranks as the sixth largest in the index, behind Alphabet but ahead of Berkshire Hathaway.

According to an analysis from Howard Silverblatt, senior index analyst for S&P Dow Jones Indices, $90.3 billion in trades were required to add Tesla to funds tracking the S&P 500. Given the size of the stock, for ever $11.11 Tesla’s stock moves, the S&P 500 changes 1 point, based on closing prices on Friday.

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9:31 a.m. ET: Stocks open lower

Here were the main moves in markets, as of 9:31 a.m. ET:

  • S&P 500 (^GSPC): -44.04 points (-1.19%) to 3,665.37

  • Dow (^DJI): -311.07 points (-1.03%) to 29,867.98

  • Nasdaq (^IXIC): -125.31 points (-0.98%) to 12,635.21

  • Crude (CL=F): -$2.21 (-4.5%) to $46.89 a barrel

  • Gold (GC=F): -$2.60 (-0.14%) to $1,886.30 per ounce

  • 10-year Treasury (^TNX): -1.8 bps to yield 0.93%

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9:20 a.m. ET: What we know and don’t know yet about the UK’s coronavirus variant: Yale’s Forman

Dr. Howard Forman, Yale University professor of radiology and biomedical imaging, public health, management and economics, cautioned against jumping to conclusions over the implications of the UK’s newly identified coronavirus variant, given that much remains unknown about its transmission or resistance – or lack thereof – to existing COVID-19 vaccines.

“I think there are two things that have caught people’s attention. One is this question of whether it’s actually more infectious than the other strains have been. It is certainly possible that it is, but it’s also not certain that it is,” Forman told Yahoo Finance on Monday. “One of the possibilities is that people perceive greater infectiousness just because the UK has just released a lockdown, they started to spread more, and you had a spike in cases that might have been reflecting this new variant. So we don’t know for sure that this is more infectious, that’s number one.”

“Number two, there’s no evidence that it’s more virulent, there’s no evidence that it leads to more severe disease or more death,” he added. “And I think the other most important thing right now is that what people have latched onto is this idea that the spike protein has mutated. And the spike protein as we know is how the virus gets into cells, and it is also how we’ve made all of our vaccines, at this point, is targeting the spike protein. There is no evidence that this change makes our vaccines any less effective at the moment.”

“So those to me are really important to remember at a time when humility must be paramount,” he said. “We know very, very little we should not panic about this.”

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7:13 a.m. ET Monday: Stock futures point sharply lower on new virus jitters

Here were the main moves in markets, as of 7:13 a.m. ET Monday:

  • S&P 500 futures (ES=F): 3,645.5, down 60.75 points or 1.64%

  • Dow futures (YM=F): 29,673.00, down 440 points or 1.46%

  • Nasdaq futures (NQ=F): 12,578.25, down 134.25 points or 1.06%

  • Crude (CL=F): -$1.87 (-3.81%) to $47.23 a barrel

  • Gold (GC=F): -$3.60 (-0.19%) to $1,885.30 per ounce

  • 10-year Treasury (^TNX): -4.5 bps to yield 0.903%

© Provided by Yahoo! Finance A Christmas tree is pictured outside the New York Stock Exchange during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., December 16, 2020. REUTERS/Carlo Allegri

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