US STOCKS-Wall St falls after J&J vaccine data, hedge fund-retail investor clash

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)
* J&J COVID-19 vaccine 72% effective in U.S., 66% globally
* GameStop plays surge as brokerages ease restrictions
* Popular mega-cap long positions take a hit
* Indexes down: Dow 0.80%, S&P 0.80%, Nasdaq 0.94%

(Updates prices to open)
By Devik Jain and Shreyashi Sanyal
Jan 29 (Reuters) - U.S. stock indexes fell on Friday after
COVID-19 vaccine data from Johnson & Johnson hurt sentiment,
while worries over a growing standoff between hedge funds and
retail investors persisted.
Shares of Johnson & Johnson JNJ.N fell 4% after the
drugmaker said its single-dose vaccine was 72% effective in
preventing COVID-19 in the United States, with a lower rate of
66% observed globally. The results compare to the high bar set by two authorized
vaccines from Pfizer Inc PFE.N /BioNTech SE BNTX.O and
Moderna Inc MRNA.O , which were around 95% effective in
preventing symptomatic illness in pivotal trials when given in
two doses.
"While it's good to have another entrant, the question is
the efficacy. The concern is if it's a lot less effective, then
investor and consumer confidence will be substantially lower,"
said Sam Stovall, chief investment strategist at CFRA Research.
Moderna jumped 10.2%, helping cushion some declines on the
Nasdaq .IXIC . The Nasdaq Biotechnology index .NBI added
1.8%.
All the three main indexes tracked their biggest weekly fall
since the end of October.
Worries of a short squeeze grew after an army of retail
investors returned to trade shares in GameStop Corp GME.N , AMC
Entertainment Holdings Inc AMC.N and BlackBerry Ltd BB.N .
Shares of the companies surged after Robinhood and
Interactive Brokers said they planned to ease restrictions after
imposing buying halts a day earlier. Investor favorites including Apple Inc AAPL.O were sold
off by hedge funds recently to cover billions of dollars in
losses.
Shares in Apple, Amazon.com Inc AMZN.O , Microsoft Corp
MSFT.O , Facebook Inc FB.O , Netflix Inc NFLX.O , Tesla Inc
TSLA.O and Alphabet Inc GOOGL.O fell between 0.7% and 2.3%.
"The markets were vulnerable to a decline because of how far
they had advanced as compared with either moving averages, and
this Reddit activity was the catalyst that sort of triggered the
sell off," Stovall said.
Concerns over stretched valuations, new coronavirus variants
and rising COVID-19 cases kept investors on edge about a
pullback and an increase in volatility in the near-term.
The first known U.S. cases of the South African COVID-19
variant, found to be partly resistant to current vaccines and
antibody treatments, was detected in South Carolina on Thursday.
At 10:07 a.m. ET the Dow Jones Industrial Average .DJI was
down 244.21 points, or 0.80%, at 30,359.15, the S&P 500 .SPX
was down 30.23 points, or 0.80%, at 3,757.15, and the Nasdaq
Composite .IXIC was down 125.18 points, or 0.94%, at
13,211.98.
Data showed U.S. labor costs increased more than expected in
the fourth quarter amid a jump in wages, supporting views that
inflation could accelerate this year, while a report showed U.S.
consumer spending fell for a second straight month in December.
Honeywell International Inc HON.N fell 1.7% after it
posted a 13% fall in quarterly profit. Declining issues outnumbered advancers for a 1.55-to-1 ratio
on the NYSE and a 1.18-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and no new
low, while the Nasdaq recorded 31 new highs and eight new lows.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Traders return to GameStop plays as brokerages ease restrictions
restricts buying of fractional shares in GameStop,
other hot stocks to stocks continues amid retail frenzy - BofA
broker notes to memes: how the stock market went viral
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>