Dow futures drop 500 factors, beneath strain from issues over a brand new viral pressure of Covid within the UK

Stock futures were deep in the red early Monday as excitement for a coronavirus stimulus deal was overwhelmed by worries over a viral new strain of Covid in the UK

Futures on the Dow Jones Industrial Average lost 514 points, or 1.7%. S&P 500 futures were down 1.9% and Nasdaq 100 futures were down 1.3%.

Investors may also seek profits after an unexpected banner year with an agreed incentive. With just two weeks of trading left in 2020, the S&P 500 is up 14.8% over the year, while the Dow is up 5.8% with 30 stocks. The Nasdaq Composite gained 42.2% this year as investors preferred high-growth technology companies.

Travel-related stocks came under pressure early Monday when an infectious new strain of coronavirus was reported in the UK, triggering tougher bans and travel restrictions across Europe.

The shares of Norwegian and Royal Caribbean Cruise Lines each fell more than 9% in premarket trading. Delta Air Lines lost 8% in early trading. Shares in companies that would be hit by tougher lockdowns, including Wynn Resorts and Gap, fell.

“There was indeed a lot of encouraging news this morning, despite being overshadowed (for now) by the dire UK headlines,” Vital Knowledge’s Adam Crisafulli wrote in a message to customers. “The market is in a tug-of-war between the very dire short-term COVID backdrop and the increasingly hopeful medium / long-term prospects (driven by vaccines) – the latter forces are stronger overall, but occasionally the market decides to focus on the former, and stocks suffer. “

The losses even came after lawmakers reached an agreement on a $ 900 billion aid package that would provide direct payments and unemployment relief to struggling Americans. The announcement came after negotiators resolved a key sticking point by withdrawing the Federal Reserve’s emergency lending powers.

Congress passed a one-day spending bill to avoid a government shutdown that would have started at 12:01 a.m. ET on Monday. President Donald Trump signed the measure late Sunday night, according to White House spokesman Judd Deere.

The legislature will vote on the aid and financing law on Monday.

Key averages recently hit record highs amid optimism about a new coronavirus stimulus as well as the launch of the vaccine. Moderna ships its first batch of vaccine doses after the US Food and Drug Administration received approval for emergency use. In the meantime, Pfizer and BioNTech vaccines are being distributed to health care workers across the country.

“In the eyes of stocks, the unstoppable vaccination process that has just begun is stronger than current trends in cases and locks, and this will prevent the markets from delving too deep into a source of pandemic desperation,” said Adam Crisafulli , Founder of Vital Knowledge, said in a note on Sunday.

“We remind you that the three pillars of the rally are all largely still in place: vaccines, strong corporate earnings and massive momentum,” he added.

When it opens on Monday, Tesla will join the S&P 500 with a weight of 1.69% in the index, the fifth largest. The share fell by 5% in premarket trading.

On Friday, the Fed announced that it would allow the country’s major banks to resume share buybacks in the first quarter of 2021, subject to certain rules. JPMorgan shares were up 2% in premarket trading.

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