Wall Street Close: COVID pandemic cases surging sink US stocks

US stocks on Wall Street have been tarnished with the surge in US coronavirus cases and the prospects of subsequent lockdowns and harsh economic restriction policies under a Democratic lead White House.

While the news of Pfizer Inc.’s Covid-19 vaccine has been welcomed, the continuing rise in Covid cases weighs on risk sentiment and investors have weighed the timeline for the mass rollout.

The US covid outbreak is uncontrolled throughout all states and we had already started to see a rotation from economic growth stocks back into the stay-at-home choices again on Wednesday. 

New York became the latest state to introduce stricter social distancing rules with new infections in the country staying above the psychological 100,000 for an eighth consecutive day. 

While the vaccine is on track to be authorized as early as next month, there are still many logistical challenges in getting enough people vaccinated.

Additionally, while new data showed that US jobless claims fell to a seven-month low last week, the pace of job recovery has slowed.

Consequently, the Dow Jones Industrial Average lost 358.48 points, or 1.22%, to 29,039.15, the S&P 500 fell  38.94 points, or 1.09%, to 3,533.72 and the Nasdaq composite dropped 84.98 points, or 0.72%, to 11,701.45.

''The blue-chip Dow DJI was pulled down by industrial and financial companies sensitive to economic growth, with Boeing Co BA and Goldman Sachs GS each down more than 2%,'' Reuters reports.

''Airlines and cruise operators, among the hardest hit by the coronavirus pandemic, also fell.''

However, it is not all bad news for stocks this week and despite the drop today, the S&P 500 has gained almost 2% so far this week.

Stocks are elevated on a weekly basis following the US election result, yet to be officially confirmed, but buoyed on the prospects of a divided Congress.

With the GOP expected to hold the Senate, the new President-elect Joe Biden would be prevented from enacting tax hikes that would hurt corporate profits.