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US: Nasdaq falls on weak day for stocks amid Covid-19 closures

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A rally on Wall Street fizzled on Monday following more signs of coronavirus troubles in the United States after European equities were boosted by progress towards a vaccine.

[NEW YORK] A rally on Wall Street fizzled on Monday following more signs of coronavirus troubles in the United States after European equities were boosted by progress towards a vaccine.

The tech-rich Nasdaq Composite Index, which has surged to repeat records in recent weeks, tumbled 2.1 per cent following the announcement California was imposing fresh restrictions to address the coronavirus.

"We're moving back into a modification mode of our original 'stay-at-home' order," California Governor Gavin Newsom said as he ordered all indoor restaurants, bars and movie theaters to close again.

Bourses in Europe won more than one percent and the Dow had initially piled on more than 500 points following an announcement from Pfizer and BioNTech announcing that two of four vaccine candidates for the coronavirus received "Fast Track" designation from the US Food and Drug Administration.

But US equities turned sharply lower in the final two hours of trading.

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California's move comes on the heels of other restrictions imposed in Texas, Arizona and other major states that are also contending with big jumps in Covid-19 cases.

Briefing.com analyst Patrick O'Hare also attributed the Wall Street retreat to the massive increase in the US deficit due to the waves of emergency spending to blunt the impact of the pandemic, which came in at US$864 billion in June compared with US$8 billion in the year-ago period.

That figure was "sobering" and weighed on the market that many had viewed as overbought, he said.

"It was a market that was ripe for a pullback," said Mr O'Hare, who added that investors are also cautious ahead of earnings releases from JPMorgan Chase and other large banks in the coming days.

Mr O'Hare also cited comments from US Secretary of State Mike Pompeo objecting to Beijing's claims in the South China Sea, another ratcheting up of tensions between Washington and Beijing.

In other markets, oil prices fell on festering fears over demand-destroying coronavirus, and before this week's expanded Opec+ technical gathering of key crude producers who are expected to roll back production cuts as demand starts to climb.

In Paris, Ubisoft shares dived after the gaming company revealed over the weekend that its second most powerful executive was among the senior staff to have left the firm as it pursues an internal investigation into sexual harassment allegations.

Last month the French company, one of the world's largest video game publishers whose portfolio includes Assassin's Creed and Far Cry, launched a probe after allegations of sexual misconduct were shared online.

Serge Hascoet, chief creative officer and the company's second-in-command, has now resigned along with human resources director Cecile Cornet, Ubisoft said.

AFP

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