ASX set to open lower as Wall Street wobbles

US stocks are wobbling between small gains and losses while hovering around their recent record highs as coronavirus vaccines move closer to distribution and stimulus talks drag on in Washington.

A vaccine from Pfizer and German partner BioNTech, which is already in use in the UK, is on track for a positive review and potential approval in the US within the next week. The Food and Drug Administration will also consider a vaccine developed by Moderna later this month. The prospect for a vaccine is giving Wall Street hope that the economy is nearing a more direct path to a full recovery.

Wall Street has slid lower on Wednesday.
Wall Street has slid lower on Wednesday. Credit:AP

The S&P 500 is 0.5 per cent lower in early afternoon trading on Wednesday, just shy of record levels. The index is already up 2.5 per cent this month following one of its best months in years during November. The Dow Jones Industrial Average was down 0.3 per cent and the Nasdaq composite has shed 1.1 per cent. It sets up the Australian sharemarket for losses this morning, with futures at 5.05am AEDT pointing to a fall of 36 points, or 0.5 per cent, at the open.

The broader S&P 500 was roughly split between gainers and losers. Companies that stand to benefit the most from a recovering economy were putting up gains. Walt Disney, which has seen attendance at its parks suffer amid the pandemic, rose 1 per cent. Citigroup rose 1 per cent as Treasury yields gained ground in a sign of optimism for the the economy.


The yield on the 10-year Treasury rose to 0.94 per cent from 0.90 per cent late on Tuesday.

Technology stocks fell and checked much of the markets early morning gains. Health care stocks also fell.

The market has been making gains as investors weigh the continued economic damage being inflicted by the virus against anticipation for a return to normalcy as vaccines start to move closer to approval and wider distribution. The recent surge in coronavirus cases and tighter restrictions on businesses over the last few weeks has again raised the importance of a vaccine for beaten down businesses.

But there could be more economic damage in store over the next few months and investors are still closely watching Washington for any developments on another shot of stimulus for people, businesses and state governments. Congress is still divided over the size and scope of any new package and the Trump administration has added to the potential plans with a new $US916 billion ($1.23 trillion) proposal.

European markets were mixed. France’s CAC 40 was down 0.1 per cent, Germany’s DAX rose 0.6 per cent and the FTSE 100 in London rose 0.2 per cent. Asian markets mostly rose.


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