US stocks took a breather on Tuesday as investors reined in their enthusiasm about Pfizer’s coronavirus vaccine breakthrough while dumping tech shares that have surged amid the pandemic.
The Dow Jones industrial average climbed 262.95 points, or 0.9 percent, to 29,420.92 after rallying 834 points on Monday on news that Pfizer’s COVID-19 shot was more than 90 percent effective.
But the benchmark S&P 500 dropped 0.1 percent while the tech-heavy Nasdaq tumbled close to 1.4 percent as Wall Street realized the pandemic-battered economy is still months away from getting back to normal.
“People took the chaser yesterday and the shot this time around,” Pierce Crosby, general manager at TradingView, told The Post. “The muted market is kind of everybody coming to terms with the fact that we are still way out from distribution on a national level of any kind of vaccine.”
Investors continued to sell off pricey tech stocks that have benefited from the virus-related lockdowns, such as Zoom and Amazon, and bet on sectors that took a beating amid the pandemic.
Those included energy companies like Chevron and industrial firms like Boeing, which were among the Dow’s biggest gainers Tuesday.
Market observers say that pattern may continue as drugmakers press ahead with their efforts to produce a vaccine for the deadly virus. Pfizer and its German partner, BioNTech, could ask the feds for emergency approval of their shot by the end of the month, and late-stage clinical trials are underway in the US for candidates from Moderna, AstraZeneca and Johnson & Johnson.
“The pandemic-proof stocks have sky-rocketed this year and it’s those that are now set to underperform as the world starts to find its feet again,” said Craig Erlam, senior market analyst at OANDA.
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But health experts have cautioned that a vaccine won’t be widely available until sometime next year. In the meantime, parts of the world are grappling with a surge in coronavirus infections that led the US to report nearly 120,000 new cases on Monday, according to Johns Hopkins University.
Policymakers could also ease up on their efforts to shore up the pandemic-battered economy if the vaccine does help economic activity restart faster than expected, according to market experts.
“The potential for medical news to affect the economy and the markets remains very real, and very likely,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “The risks have not gone away.”
