Dow Ends Lower as Bulls Retreat on Covid Restrictions, Boeing U-turn

The Dow ended lower following late-day selling Wednesday on signs of further Covid-19 restrictions in the U.S. that threaten the pace of the recovery, and an intraday reverse in Boeing.

The Dow Jones Industrial Average fell 1.16%, or 345 points. The S&P 500 was down 1.17%, while the Nasdaq Composite fell 0.82%.

Boeing (NYSE:BA) cut gains after Morgan Stanley warned that bullish sentiment on the stock was getting ahead of fundamentals. The aircraft had been up more than 6% intraday after the Federal Aviation Authority ordered the ungrounding of Boeing’s 737 Max, which was involved in two deadly crashes.

The positive vaccine news and the 737 Max ungrounding “does not affect our financial estimates for Boeing,” Morgan Stanley (NYSE:MS) said in a note, Bloomberg reported. Getting more positive on Boeing would require a ramp-up in orders of the aircraft.

Following the news, several airlines that carry the 737 Max in their fleet confirmed they would begin to fly the jets within weeks.

United Airlines (NASDAQ:UAL) said it plans to fly its Boeing 737 Max jets in the first quarter next year, while American Airlines (NASDAQ:AAL) said it will fly at the end of the year. Southwest Airlines (NYSE:LUV) will fly the jets in the second quarter.

Sentiment on stocks was dealt a further blow on signs of further restrictions to curb the spread of the coronavirus, with deaths nearing 250,000. New York City shut schools starting on Thursday, and switched to fully remote learning.

The move higher in value stocks on positive vaccine faded, adding downside momentum on the broader market.

Pfizer (NYSE:PFE) and BioNTech reported final data analysis showing their coronavirus vaccine was 95% effective in preventing Covid-19, and also said they had surpassed the safety levels needed to seek authorization for the vaccine within days.

Energy stocks also gave up gains even as oil prices were pushed higher following a smaller-than-expected build in weekly inventories.

U.S. weekly crude inventories rose by 0.78 million barrels, according to the Energy Information Administration, well below forecasts of 1.65 million.

On the earnings front, investors digested earnings from Target and Lowe’s.

Target (NYSE:TGT) reported better-than-expected earnings of $2.79 a share and same comparable-store sales of 20.7% that topped estimates, sending its shares about 3% higher.

Lowe’s Companies (NYSE:LOW), meanwhile, reported third-quarter earnings of $1.98 per share just missed estimates, but same-store sales jumped 30.1%, above expectations for a 22.8% increase. Its shares fell 8%.

Tech struggled to participate in the broader move higher. Amazon.com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB) and Apple (NASDAQ:AAPL) ended lower.

In other news, General Motors (NYSE:GM) climbed 2% on reports the automaker is set to unveil a plan to ramp-up spending on electric vehicle expansion.