Technology stocks pared gains as stock indexes fell and shares of pandemic-sensitive companies slid amid fears of disruption to coronavirus vaccine supplies.
The Nasdaq fell less than 0.2% in morning trading on Monday after being up more than 1% in early trading following a record at the end of last week. The S&P 500 fell 0.5%, while the Dow Jones Industrial Average fell 0.9%.
“You’re getting rotation out of the more cyclical stocks. These big tech stocks are perceived as a bit of a haven trade,” said Michael Hewson, a chief markets analyst at CMC Markets. “There’s also talk of disruptions to vaccine supply, so we’ll likely have slower vaccine rollout and tighter restrictions for longer. What we’re seeing is a recovery deferred, or delayed.”
Pharmaceutical giant Merck scrapped its plans to develop a Covid-19 vaccine after trials yielded disappointing results, pulling a major player out of the coronavirus vaccine race and sending its shares down 0.8%. This came after AstraZeneca warned on Friday that its vaccine deliveries to the European Union would lag projections.
Meanwhile, investors were focused on a big week for corporate earnings, expected to show which corporations are thriving and which are struggling amid the Covid-19 pandemic.