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Dow, Tech Stocks Slide As Three-Day Rally Stalls Amid COVID, Inflation Focus

Wall Street may snap it recent three-day winning streak Thursday as investors track Covid developments in Europe, and at home, while setting up for tomorrow's crucial November inflation report.

U.S. stocks slipped lower Thursday as investors hit pause on a solid three-day rally that has taken the S&P 500 to within less than 1% of its all-time highs amid concern over a developing winter wave of coronavirus infections and uncertainty linked to Evergrande's pending default in China.

Britain unveiled stricter Covid restrictions heading into the Christmas holidays last night, following on from similar decisions taken on Continental Europe, as case counts and hospitalizations continue to rise. The moves have been muted somewhat by advances in therapy treatments and vaccine efficacy, but are nonetheless concerning heading into the worst of the pending winter wave.

In China, indebted property developer Evergrande was officially declared to have defaulted on portions of its domestic obligation by Fitch Ratings, potentially triggering a so-called 'cross default' on some $19 billion in foreign currency debt.

On Wall Street, the market's focus Thursday will likely center on weekly jobless claims data, which showed applications fell to a post-pandemic low of 184,000 over the period ending on December 4, as well as after-the-bell earnings from Oracle  (ORCL) - Get Oracle Corporation Report, Broadcom  (AVGO) - Get Broadcom Inc. Report and Costco Wholesale  (COST) - Get Costco Wholesale Corporation Report

Investors will also track the headcount in today's Senate vote to lift the Federal government's $28.6 debt ceiling later today following a House effort earlier this week. If the move is successful, two further votes -- one in each chamber -- will be needed before the December 15 deadline.

In the meantime, the Dow Jones Industrial Average fell 152 points in the opening hour of trading while the S&P 500 peeled back 15 point pullback. 

The tech-focused Nasdaq Composite dipped 35 point dip at the start of trading as benchmark 10-year Treasury note yields eased to 1.49% in early New York trading following yesterday's solid auction of $36 billion in re-issued notes.

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CVS Health  (CVS) - Get CVS Health Corporation Report shares were a notable early mover, rising 2.3% after it said it would boost its dividend, and resume share buybacks for the first time in four years, ahead of the group's first investor day even under new CEO Karen Lynch.

Apple  (AAPL) - Get Apple Inc. Report shares were also active, rising 0.8% as it was crowned a ‘favorite idea’ for investors for 2022 by one influential Wall Street analyst while being dubbed a “tech safety blanket” by another following last night's record high close.

GameStop Corp.  (GME) - Get GameStop Corp. Class A Report fell 5.6% after the video game retailer, and meme stock favorite, posted a bigger-than-expected third quarter loss and unveiled detail of a Securities and Exchange Commission subpoena.

Rent The Runway Inc  (RENT)  tumbled 11% after the high-end clothing rental group posted a wider-than-expected loss in it first financial report as a public company.

Amazon  (AMZN) - Get Amazon.com, Inc. Report dipped 0.05% after it was slapped with a whopping $1.3 billion fine by Italy’s antitrust regulator for crowding out its competitors by favoring third-party sellers that use the company’s logistics services.

Tecnoglass  (TGLS) - Get Tecnoglass Inc. Report shares plunged 39% after noted short-selling group Hindenburg Research issued a report that cited "serious red flags" at the Florida-focused construction supplies maker.

In overseas markets, Europe's Stoxx 600 was marked 0.13% lower by mid-day trading in Frankfurt, although stronger-than-expected German export data and a dovish European Central Bank supported sentiment, while the Asia region MSCI ex-Japan index closed out the session with a 0.7% gain on bets on deeper stimulus from the People's Bank of China.

U.S. oil prices edged lower, pushed down by a stronger U.S. dollar, as traders reacted to Energy Department data showing inventories in the Strategic Petroleum Reserve fell to the lowest since May 2003 following President Joe Biden's decision to release 50 million barrels late last month

WTI futures for January delivery were marked 73 cents lower from Wednesday's close to change hands at $71.63 per barrel while Brent contracts for February, the global pricing benchmark, fell 76 cents to $75.05per barrel.