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Wall Street Drops 318 Points as Pandemic Fears Return

Wall Street Drops 318 Points as Pandemic Fears Return

Thursday, 12 November 2020 04:31 PM

Wall Street ended sharply lower on Thursday as U.S. coronavirus infections surged and investors weighed the timeline for the mass rollout of an effective vaccine.

New York became the latest state to introduce stricter social distancing rules on Wednesday, as new infections in the country surged above 100,000 for an eighth consecutive day.

The blue-chip Dow was pulled down by industrial and financial companies sensitive to economic growth, with Boeing Co and Goldman Sachs down 3% and 1.6%, respectively.

Airlines and cruise operators, among the hardest hit by the coronavirus pandemic, also fell. The S&P 1500 airlines index dropped 3.1%, while Royal Caribbean Cruises Ltd fell 4% and Carnival Corp tumbled almost 8%.

“The market is reacting to the rise in COVID cases nationwide," said Michael Antonelli, a market strategist at Baird in Milwaukee. "Vaccine news helps at some point in the future, but today we are dealing with an accelerating spread,”

Even after Thursday's drop, the S&P 500 has gained almost 2% this week, buoyed by positive vaccine trial data that increased expectations of a quick economic recovery. Stocks have also benefited from expectations that a divided Congress will thwart tax hikes that would hurt corporate profits.

"The reality is that we don't know what the new normal is going to look like, even when we do recover from the coronavirus, and that is still a ways away," said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta.

"It’s the classic between the market discounting something that is nine to 12 months out, and then 'undiscounting' it because it has not happened yet."

In extended trade, Cisco Systems Inc jumped 8.6% after the network gear maker reported its quarterly results.

New data showed U.S. jobless claims fell to a seven-month low last week, but the pace of job recovery slowed as fiscal stimulus waned and further improvement could be limited by a raging pandemic.

The Dow Jones Industrial Average fell 317.46 points, or 1.08%, to 29,080.17, the S&P 500 lost 35.65 points, or 1.00%, to 3,537.01 and the Nasdaq Composite dropped 76.84 points, or 0.65%, to 11,709.59.

Among the biggest boosts to the Nasdaq was a surge 20% in the U.S.-listed shares of Chinese e-commerce company Pinduoduo Inc after it reported strong quarterly revenue.

Rival JD.com Inc's shares climbed 4.3%.

The S&P 500 energy index slumped 4% and materials lost 2.5%.

Moderna Inc rallied 6.5% after the drugmaker said it had enough data for a first interim analysis of the late-stage trial of its experimental COVID-19 vaccine. It did not say when it plans to release the data.

On U.S. exchanges, 10.3 billion shares changed hands, compared to an average of 10.0 billion shares for the last 20 sessions.

Declining issues outnumbered advancing ones on the NYSE by a 2.95-to-1 ratio; on Nasdaq, a 2.17-to-1 ratio favored decliners.

The S&P 500 posted five new 52-week highs and no new lows; the Nasdaq Composite recorded 70 new highs and 11 new lows.


The surge in new coronavirus infections prompted a retreat of European shares away from eight-month highs, with banks leading the decline, as hopes waned for a quick economic rebound.

The pan-European STOXX 600 index lost 0.88% and MSCI's gauge of stocks across the globe shed 0.66%.

Emerging market stocks rose 0.15%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.09% higher, while Japan's Nikkei rose 0.68%.

U.S. Treasury yields, which can be viewed as a gauge of risk appetite, slumped amid the risk-off mood and economic data that showed U.S. inflation remains tepid.

Benchmark 10-year notes last rose 33/32 in price to yield 0.8815%, from 0.989% late on Tuesday.

The 30-year bond last rose 84/32 in price to yield 1.6427%, from 1.76% late on Tuesday.

Crude oil prices reversed early gains, snapping a three-day rally on growing doubts over a near-term demand recovery and an unexpected rise in U.S. stockpiles.

U.S. crude fell 0.8% to settle at $41.12 per barrel, while Brent settled at $43.53 per barrel, down 0.6% on the day.

The dollar was slightly down against a basket of currencies, reflecting investor caution regarding vaccine expectations amid the latest wave of infections.

The dollar index fell 0.06%, with the euro up 0.25% to $1.1807.

The Japanese yen strengthened 0.31% versus the greenback at 105.12 per dollar, while Sterling was last trading at $1.3119, down 0.77% on the day.

Risk-off sentiment attracted investors back to gold, which continued to recover some ground that the safe-haven metal lost in Monday's plunge.

Spot gold added 0.6% to $1,876.36 an ounce.

© 2021 Thomson/Reuters. All rights reserved.

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Stocks slumped and Treasuries rallied as a resurgence in coronavirus cases added to concern about tougher restrictions that could slow down the economic recovery without further stimulus.
stocks, market, wall street, dow, lockdown, virus, stimulus
Thursday, 12 November 2020 04:31 PM
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