NEW YORK (AP) — Wall Street is tapping the brakes on its record-setting rally this week, as markets worldwide take a pause on Friday.

The S&P 500 was 0.3% lower in early trading, a day after inching up to its second straight all-time high. The Dow Jones Industrial Average was down 189 points, or 0.6%, at 30.986, as of 9:50 a.m. Eastern time, and the Nasdaq composite was down 0.1%.

Losses for stocks started early in Asia and then carried westward on worries about resurgent coronavirus cases in China and weak economic data from Europe. In the United States, disappointing earnings reports from IBM and some other companies gave cover for investors to sell and book profits after big recent gains. The S&P 500 is still on pace for a 1.9% weekly gain, its third in four weeks.

IBM dropped 10.5% for one of the sharpest losses in the market after it reported weaker revenue for the last three months of 2020 than analysts expected. The tech giant’s revenue has been mostly shrinking for years.

IBM nevertheless, though, reported a higher profit for the end of 2020 than Wall Street expected. That’s been the big theme so far in the early part of this earnings season, with about 13% of companies in the S&P 500 having reported. With bank and some other industries leading the way, profit reports have consistently come in better than Wall Street had feared.

Seagate Technology fell 6.5% despite joining the cavalcade of companies to report better earnings for the latest quarter than expected. It also gave a forecast for revenue and profit in the current quarter that matched or topped Wall Street’s. Analysts said a lot of that optimism may have already been built into the stock.

Markets have been mostly rallying recently on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year as daily life gets closer to normal. Hopes are also high that Washington will deliver another dose of stimulus for the economy now that the White House and both houses of Congress are under single control of the Democrats.

But the coronavirus pandemic is worsening and doing more damage to the economy by the day. In Europe, a survey of purchasing managers showed economic activity shrank in January in the 19-country eurozone. The data suggests the eurozone’s economy is likely to shrink again in the first three months of this year.

In European stock markets, France’s CAC 40 fell 0.7%, and Germany’s DAX lost 0.2%. The FTSE 100 in London dropped 0.5%.

In China, where the pandemic began in late 2019, the government has reimposed travel controls after outbreaks in Beijing and other cities. A spike in infections has authorities calling on the public to avoid travel during February’s Lunar New Year holiday, normally the year’s most important family event.

That has “raised some concerns among investors who, after a slow start to the global vaccine rollout, are debating how fast economies can vaccinate the most vulnerable and start returning to business as usual,” said Stephen Innes of Axi in a report.

Stocks in Shanghai slipped 0.4% on Friday, while Hong Kong's Hang Seng lost 1.6%. Japan's Nikkei 225 fell 0.4%, and South Korea's Kospi dropped 0.6%.

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AP Business Writer Joe McDonald contributed.