Stocks drop as NYC school closure saps sentiment

U.S. stocks slumped as fresh restrictions to curtail the spread of coronavirus overshadowed signs that scientists are making fast progress toward a vaccine. The dollar held near its lowest level in two years.

The S&P 500 Index closed at its lows of the day after New York City shut schools because of rising infections. Pfizer Inc. advanced after saying that its covid-19 vaccine was 95% effective, paving the way for the company to apply for the first U.S. regulatory authorization for a coronavirus shot within days. Lowe's Cos Inc. slumped after earnings trailed analysts' expectations, while Target Corp. advanced on soaring sales.

Cryptocurrency mania continued its comeback, with Bitcoin surging past $18,000 for the first time since December 2017 before erasing its advance.

After gains that pushed stocks to record highs earlier this week, money managers remained focused on the latest coronavirus data showing disturbingly high infection rates in Europe and the U.S. Wednesday marked the first time the S&P 500 had dropped for two consecutive days since late October.

"Investors are taking a well-earned timeout after the news of the last couple weeks saw sentiment surge to levels that suggested excessive optimism," said Adam Phillips, director of portfolio strategy at EP Wealth Advisors. "Progress toward a vaccine is promising and suggests a light at the end of the tunnel, but there's no telling for sure how long that tunnel is."

Elsewhere, equity gauges closed green across Europe. The pound continued its advance amid hopes of a Brexit deal and data showing stronger-than-expected inflation. The Nikkei 225 Stock Average lost 1.1% after Tokyo reported a record number of new covid-19 infections, but overall Asian stocks were slightly higher on the day.

These are the main moves in markets:

Stocks

--The S&P 500 Index fell 1.2% at 4 p.m. EST.

- The Stoxx Europe 600 Index rose 0.4%.

- The MSCI Asia Pacific Index increased 0.1%.

- The MSCI Emerging Market Index climbed 0.4%.

Currencies

- The Bloomberg Dollar Spot Index was little changed.

- The euro fell 0.1% to $1.1854.

- The British pound rose 0.2% to $1.3269.

- The Japanese yen strengthened 0.3% to 103.86 per dollar.

Bonds

- The yield on 10-year Treasurys rose two basis points to 0.87%.

- Germany's 10-year yield rose one basis point to -0.56%.

- Britain's 10-year yield rose one basis point to 0.33%.

Commodities

- West Texas Intermediate crude gained 0.6% to $41.69 a barrel.

- Gold fell 0.6% to $1,869.54 an ounce.