Stocks drop as virus cases rise; gold rallies

Stocks hit record highs early in the New York session as investors focused on the rollout of COVID-19 vaccines. But sentiment quickly turned cautious over the path of the virus, which continues to spread amid the discovery of a new variant.

The outcome of runoff elections on Tuesday in Georgia for two U.S. Senate seats added to the nervousness.

MSCI's All-Country World Index, which tracks stocks across 49 countries, was down 0.5% after earlier hitting a record.

The Dow Jones Industrial Average fell 382.59 points, or 1.25%, to 30,223.89, the S&P 500 lost 55.42 points, or 1.48%, to 3,700.65 and the Nasdaq Composite dropped 189.84 points, or 1.47%, to 12,698.45.

The pan-European STOXX 600 index rose 0.67%, while Britain's FTSE 100 index closed up 1.7% on its first post-Brexit trading day.

With the lag between a full vaccine rollout and a global economic recovery, investors will count on central banks to keep money cheap.

Minutes of the Federal Reserve's Dec. 15-16 policy meeting are due on Wednesday and should offer more details on discussions about making the U.S. central bank's forward policy guidance more explicit and the chance of a further increase in asset purchases this year.

In currency trading, the U.S. dollar recovered after falling to its lowest level since April 2018.

The dollar index rose 0.149%, with the euro up 0.92% to $1.2249.

The Japanese yen strengthened 0.06% versus the greenback to 103.14 per dollar, while Sterling was last trading at $1.3564, down 0.78% on the day.

Spot gold prices gained 2.3%, while U.S. crude oil futures fell 1.9% to settle at $47.62 a barrel and Brent futures dropped 1.4% to $51.09.

Oil prices slipped after OPEC+ failed to decide whether to increase output in February and agreed to meet again on Tuesday.

U.S. Treasury yields edged higher as traders repositioned at the start of trading in the new year. The benchmark 10-year yield was last up less than a basis point at 0.9165%.