Stock sell-off widespread
COVID-19 cases are up, financial markets are down, and the election is days away. The Dow sank 943 points Wednesday and the S&P 500 slid 3.5%.
The Dow Jones Industrial Average sank 943 points Wednesday as surging coronavirus cases forced more shutdown measures in Europe and raised fears of more restrictions in the U.S.
The S&P 500 slid 3.5%, its third straight loss and its biggest drop since June. The benchmark index is already down 5.6% this week, on track for its biggest weekly decline since March, when the market was in the midst of selling off as strict lockdowns around the world choked the economy into recession.
Investors are growing anxious that the economy will lose momentum should more shutdowns occur just as prospects for more economic support from Washington have dwindled.
The S&P 500 lost 119.65 points to 3,271.03. The Dow lost 943.24 points, or 3.4%, to 26,519.95. The Nasdaq composite slumped 426.48 points, or 3.7%, to 11,004.87. The selling was widespread, and 96% of stocks in the S&P 500 fell.
The selling in U.S. markets followed broad declines in Europe, where the French president announced tough measures to slow the virus’s spread and German officials agreed to impose a four-week partial lockdown. The measures may not be as stringent as the shutdown orders that swept the world early this year, but the worry is they could still hit the already weakened global economy.
Coronavirus counts are also climbing at a troubling rate in much of the United States, and the number of deaths and hospitalizations due to COVID-19 are on the rise. Even if the most restrictive lockdowns don’t return, investors worry that the worsening pandemic could scare away customers of businesses regardless and sap away their profits.
Benchmark U.S. crude dropped 5.7% to $37.39 per barrel. Brent crude, the international standard, fell 5.4% to $39.12 per barrel.
Investors headed into the safety of U.S. government bonds. The yield on the 10-year Treasury note fell to 0.77% from 0.79% late Tuesday. It was as high as 0.87% last week.
Even the continued parade of better-than-expected reports on corporate profits for the summer failed to shift the momentum.
Microsoft, the second-biggest company in the S&P 500, reported stronger profit and revenue for its latest quarter than expected. That’s typically good for a stock, but Microsoft nevertheless slumped 5%. It gave a forecast for the current quarter that was relatively in line with Wall Street forecasts, but analysts noted some caveats in it.
UPS fell 8.8% after also reporting better-than-expected earnings, though it said the outlook for its business is too cloudy due to the pandemic to offer any forecasts for its revenue or profits in the current quarter.
Companies broadly have not been getting as big a pop in their stock prices as they typically do after reporting healthier-than-expected profits.
Gold for December delivery fell $32.70 to $1,879.20 an ounce. Silver for December delivery fell $1.21 to $23.36 an ounce and December copper fell 3 cents to $3.06 a pound.
The dollar fell to 104.34 Japanese yen from 104.49 yen. The euro fell to $1.1752 from $1.1814.