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'We've Got a Wobbly Start to the Year Here'

S&P 500 drops 1.5% as virus surges worldwide
By Newser Editors and Wire Services
Posted Jan 4, 2021 3:41 PM CST

(Newser) – Us stocks pulled back from their recent record highs Monday, as big swings returned to Wall Street at the onset of a year where the dominant expectation is for a powerful economic rebound to sweep the world. The S&P 500, which ended 2020 at an all-time high, slid 1.5% after earlier dropping as much as 2.5%. It was the benchmark index's biggest decline since late October. Technology companies accounted for a big share of the sell-off, along with industrial, communication services, health care, and others. The S&P 500 fell 55.42 points to 3,700.65. The Dow Jones Industrial Average also fell from its record set last week, shedding 382.59 points, or 1.3%, to 30,223.89. At one point, it was down 724 points. The tech-heavy Nasdaq composite lost 189.84 points, or 1.5%, to 12,698.45.

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The selling comes as coronavirus cases keep climbing at frightening rates around the world, threatening to bring more lockdown orders that would punish the economy, the AP reports The worsening numbers also raise the possibility that Wall Street has been overly optimistic about the big economic recovery it sees coming because of COVID-19 vaccines. Tuesday's upcoming runoff elections to determine which party controls the Senate may also be contributing to the volatility. "We’ve got a wobbly start to the year here," says Lindsey Bell, chief investment strategist at Ally Invest. 'Investors are looking for a reason to lock in profits. The selling is probably a bit overdone."

(Read more stock market stories.)

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