Stocks finished lower Monday as investors contemplated an upcoming Federal Reserve decision on tapering and the rise in Covid omicron infections around Europe.
The Dow Jones Industrial Average closed Monday 320 points lower to 35,650, while the S&P 500 dropped 43 points to 4,668. The Nasdaq Composite slipped 217 points to 15,413 even as benchmark 10-year Treasury note yields fell to 1.419%.
Stocks reversed premarket gains following a U.K. report of the first patient to die from an infection of the Covid omicron variant, which was first identified in the U.K. on Nov. 27.
The U.S. Federal Reserve's Federal Open Market Committee is widely expected to accelerate the tapering of its monthly bond purchases when it concludes its two-day policy meeting Wednesday.
That's particularly after Friday's data showed consumer price inflation increased 6.8% over the past year through November, the fastest rate of since 1982. New Fed projections on growth and inflation may also cement market expectations of a June rate hike.
Wall Street should have a relatively quiet week in terms of corporate earnings and will be supported by factory gate inflation data Tuesday, the Fed decision and November retail sales data Wednesday, and housing and weekly jobless claims data on Thursday.
Apple (AAPL) - Get Apple Inc. Report attempted to provide some early support as the stock looks set to test the $3 trillion market cap threshold this week following a Monday price target upgrade from JPMorgan. But the Cupertino, Calif., tech giant closed 2% lower at $175.74 a share.
Pfizer (PFE) - Get Pfizer Inc. Report shares closed 4.6% higher after it said it would buy San Diego-based biotech Arena Pharmaceuticals (ARNA) - Get Arena Pharmaceuticals, Inc. Report for around $6.7 billion in cash. Arena surged 80% to $90.08.
The shares were given further support from a U.K. study that showed a third shot of the drugmaker's Covid vaccine provides solid protection against Omicron and analysts at UBS lifted their rating and price target.
Novavax (NVAX) - Get Novavax, Inc. Report shares closed 2.2% higher after the drugmaker said it would file a package of data linked to its developing coronavirus vaccine with the U.S. Food and Drug Administration by the end of the year.
Rivian Automotive (RIVN) - Get Rivian Automotive, Inc. Class A Report, meanwhile, gained 3.7 % after its all-electric Rivian R1T was crowned 2022 Truck of the Year by the influential magazine MotorTrend.
Peloton Interactive (PTON) - Get Peloton Interactive, Inc. Class A Report shares were also on the move after the at-home exercise company released a follow-up parody ad providing clarity that its Internet-connected exercise bikes don’t necessarily cause people to drop dead.
U.S. oil prices edged lower, pushed down by a stronger U.S. dollar and new data from OPEC showing cartel members boosted their November output by 290,000 barrels per day.
WTI futures for January delivery were 46 cents lower from Friday's close to change hands at $71.22 a barrel. Brent contracts for February, the global pricing benchmark, fell 75 cents to $74.40 a barrel.