Powell Warns on COVID-19 Vaccine Expectations... New York Stock Market Closes Lower

[Asia Economy New York=Correspondent Baek Jong-min] The worsening situation of the novel coronavirus infection (COVID-19) lowered expectations for vaccines, causing major indices on the New York Stock Exchange to show a broad decline. Jerome Powell (Fed) warned against premature optimism.

On the 12th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average fell 317.46 points (1.08%) to close at 29,080.17, the S&P 500 dropped 35.65 points (1.00%) to 3,537.01, and the Nasdaq fell 76.84 points (0.65%) to finish at 11,709.59.

[Image source=Reuters Yonhap News]

With daily new COVID-19 cases in the U.S. exceeding 140,000, Fed Chair Powell said on the day, "It is too early to confidently assess how (vaccine) news will particularly affect the economic trajectory in the short term," expressing concern that "the virus spread may make the coming months difficult," which dampened investor sentiment.

The U.S. unemployment data released that day was favorable. New unemployment claims last week decreased by 48,000 from the previous week to 709,000, significantly beating the market expectation of 740,000.

Inflation indicators were weaker than expected. The October Consumer Price Index (CPI) remained unchanged from the previous month, falling short of the market forecast of a 0.1% increase, indicating sluggish real economic activity.

West Texas Intermediate (WTI) crude oil for December delivery closed down 0.8% (0.33 dollars) at 41.12 dollars per barrel. December delivery gold closed up 0.6% (11.70 dollars) at 1,873.30 dollars per ounce.

The 10-year U.S. Treasury bond, a safe-haven asset, showed strength by recording 0.883% that day. Although Treasury yields had rapidly risen close to 1% on vaccine optimism, they returned to a strong position.

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