U.S. stocks slipped from records as investors grew anxious that the virus will hamper growth for longer than expected and Democrats may struggle to get a nearly US$2 trillion spending bill through Congress.

The S&P 500 Index fell for the first time in four days, with losses widening on reports that the new virus strain may be deadlier. It rose 1.9 per cent in the week. Oil’s slump dragged energy companies lower, while Intel Corp. dropped after its new boss recommitted to chipmaking, a move opposed by some investors. Yields on Treasuries edged lower, and crude oil slid below US$53 a barrel. Bloomberg’s dollar index rose for the first time in five sessions.

Overseas markets struggled after economic data in Europe missed estimates. IHS Markit data showing a pickup in U.S. manufacturing did little to boost sentiment. Senate Republicans continued to come out against Joe Biden’s aid package, threatening the legislation’s passage in the sharply divided body.

“The virus numbers are not good right now obviously around the world, especially in the U.S. and in Europe, and we’re also getting a little bit more question about how much of the stimulus is actually feasible and what’s the timeline,” Scott Ladner, chief investment officer at Horizon Investments, said by phone. “Those two things are putting just a damper on the enthusiasm that has existed since November.”

The week’s global equity rally, spurred by expectations of economic support and the rollout of vaccines, paused as traders weigh still-troubling COVID-19 trends. Biden, who is pushing for US$1.9 trillion in additional spending, unveiled a strategy to combat the virus while warning the pandemic will worsen before it improves. Restrictions intensified from Germany and the U.K. to Hong Hong, and the European Central Bank cautioned that the euro area is headed for a double-dip recession. The U.K.’s new more contagious strain of coronavirus may be linked to higher mortality, Prime Minister Boris Johnson has said.

“Recent news flow on the pandemic has not been favorable,” said Jean-Francois Paren, global head of market research at Credit Agricole. “After the post-election wave of optimism from the U.S., markets have been left facing the reality of vaccine delivery and new lockdown measures, and the perspective of a double-dip in Europe.”

The Stoxx Europe 600 index fell for the second straight week as a gauge of private-sector activity in the euro region fell deeper into contraction and Germany cut its forecast for economic growth. The British pound weakened after Johnson said the U.K.’s third lockdown could last into the summer. Italian stocks underperformed and bond yields rose after reports Prime Minister Giuseppe Conte is considering early elections.

Elsewhere, Bitcoin rebounded to trade around US$32,000 after earlier tumbling below US$30,000.

These are the main moves in markets:

Stocks

The S&P 500 lost 0.3 per cent by 4 p.m. New York time.
The Stoxx Europe 600 Index fell 0.6 per cent.
The MSCI Asia Pacific Index dropped 0.7 per cent.
The MSCI Emerging Markets Index slipped 1.1 per cent.

Currencies

The Bloomberg Dollar Spot Index climbed 0.4 per cent.
The yen was at 103.78 per dollar, dipping 0.3 per cent.
The euro rose 0.1 per cent to US$1.2178.
The British pound weakened 0.5 per cent to US$1.3664.

Bonds

The yield on 10-year Treasuries fell two basis points to 1.08 per cent.
Germany’s 10-year yield dipped one basis point to -0.51 per cent.
The U.K.’s 10-year yield fell one basis point to 0.32 per cent.

Commodities

West Texas Intermediate crude fell 1.4 per cent to US$52.41 a barrel.
Gold dropped 0.9 per cent to US$1,852.94 an ounce.