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U.S. stock indexes traded sharply lower Thursday, with investors turning cautious as the resurgence of the COVID-19 pandemic resulted in renewed restrictions on business activity, while another financial aid package from Congress looks doubtful anytime soon.

Economic data suggests a slow U.S. recovery remains on track, while Wall Street waits for more news on vaccine development, but Federal Reserve chairman Jerome Powell said a vaccine was not an immediate panacea.

The Dow Jones Industrial Average traded off 408 points, or 1.3%, at about 28,989; the S&P 500 index declined by about 46 points to reach roughly 3,527, a drop of 1.3%; the Nasdaq Composite Index fell 93 points, or 0.8%, to 11,694. Meanwhile, the Russell 2000 fell 2.1%.

On Wednesday, the Dow ended lower by 23.29 points, or 0.1%, at 29,339.54, snapping a 2-day win streak. The S&P 500 index advanced 27.17 points to close at 3,572.72, notching a gain of 0.8%, its second-highest close ever. The Nasdaq Composite surged 232.57 points, or 2%, to finish at 11,786.43, snapping its 2-day losing streak.

Hope for a vaccine against the coronavirus is being pitted against the near-term reality of a significant rise in cases and hospitalizations in parts of the U.S. which has triggered the reimplementation of fresh social-distancing measures that could endanger a tepid economic rebound.

News on Monday from partners Pfizer and BioNTech indicated a Phase 3 study of an experimental remedy for COVID-19 had 90% efficacy and late Wednesday, Moderna Inc. MRNA said the first batch of data from its late-stage test of an experimental COVID-19 vaccine was ready for analysis

However, The Wall Street Journal, citing the Covid Tracking project, reported that new U.S. cases and hospitalizations both set records, respectively topping 144,000 and 65,000 on Wednesday. In the past week, the U.S. has averaged 128,081 cases a day, up 69% from the average two weeks ago and cases are rising in 49 states and territories.

“The virus clearly exists, that’s fair to say. We’re seeing countries go into lockdown mode and you’re beginning to wonder how many U.S. cities will shut down. The market’s being cautious,” said Kenny Polcari, managing partner at Kace Capital Advisors, in an interview.

The resurgence of the pandemic has prompted a number of states to reimpose restrictions on consumer and business activity. New York Governor Andrew Cuomo ordered bars, restaurants and gyms in New York State to close at 10 p.m. starting Friday, while Chicago’s mayor advised people to stay at home or work from home for 30 days from Monday, apart from essential travel and business.

“With case counts continuing to climb and winter approaching, the prospects for targeted rollbacks and new lockdowns continue to rise,” wrote Colin Cieszynski, chief market strategist at SIA Wealth Management, in a daily note.

Meanwhile, another financial relief package to help American businesses during the epidemic looks doubtful anytime soon, given the Trump administration is stepping back is stepping back from negotiations and leaving Senate Majority Leader Mitch McConnell to revive discussions with House Speaker Nancy Pelosi.

In economic reports, U.S. jobless benefit claims fell 48,000 to 709,000 in early November, and continuing jobless claims in states dropped 436,000 to 6.79 million.

Meanwhile, a measure of the annual rate of U.S. inflation, the consumer-price index, rose 1.2% in October, down from 1.4% in the prior month. Core CPI, excluding volatile food and energy prices, also retreated, rising 1.6%, down from 1.7% in the prior period.

However at an ECB panel, Fed Chairman Powell on Thursday said the development of an effective COVID-19 vaccine was good news but not an immediate panacea for the economy and “significant challenges and uncertainties remain about timing production, distribution, and efficacy for different groups .”

The yield on the 10-year U.S. Treasury note retreated to around 0.88% on Thursday, from around 0.98% on Tuesday. The bond market was closed in observance of Veterans Day on Wednesday. Yields and bond prices move in opposite directions.

The pan-European Stoxx 600 Europe Index closed 0.9 lower as London’s FTSE 100 ended Thursday trade off 0.7%.

Oil futures fell, with the U.S. benchmark   losing 33 cents, or 0.8% to settle at $41.12 per barrel. Gold prices finished higher, with the December contract climbing by $11.70, or 0.6%, to settle at $1,873.30 an ounce.

The ICE U.S. Dollar Index  a measure of the currency against a basket of six major rivals, was flat.

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