Stocks sink on pandemic worries
NEW YORK — Stocks closed lower on Wall Street on Monday as markets tumbled worldwide on worries about the pandemic’s economic pain. The S&P 500 fell 1.2%, though a last-hour recovery helped it more than halve its loss from earlier in the day.
European stocks slid earlier on the possibility of tougher restrictions to stem rising coronavirus counts. Bank stocks fell after a report alleged several are profiting from illicit dealings with criminal networks. Wall Street has struggled this month amid fears that stocks are expensive with the pandemic still worsening and Congress not delivering more economic aid.
Losses began in Asia as soon as trading opened for the week, and they accelerated in Europe on worries about the possibility of tougher restrictions there to stem rising coronavirus counts. In the U.S., both stocks and Treasury yields weakened, while prices sank for oil and many other commodities a healthy economy would demand.
The Dow Jones Industrial Average fell 509 points, or 1.8%, to 27,147 after earlier being down 942 points. The Nasdaq composite was 0.13% lower.
Wall Street has been shaky this month, and the S&P 500 has pulled back more than 9% since hitting a record Sept. 2 amid a long list of worries for investors. Chief among them is fear that stocks got too expensive when coronavirus counts are still worsening, Congress is unable to deliver more aid for the economy, U.S.China tensions are rising and a contentious U.S. election is approaching.
Expect the stock market to stay volatile, perhaps through the November elections, as investors must wait to see how so many questions shake out, said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management.
“To get some stability, we’re going to need some clarity on a few of those things,” he said.
Monday’s selling was exacerbated by worries about the possibility of more business restrictions in Europe, particularly as the United States heads into flu season, Draho said, and “some investors may be stepping aside.”
Bank stocks had sharp losses after a report alleged that several continue to profit from illicit dealings with criminal networks despite U.S. crackdowns on money laundering.
The International Consortium of Investigative Journalists said documents indicate Jpmorgan Chase moved money for people and companies tied to the massive looting of public funds in Malaysia, Venezuela and the Ukraine, for example. Its shares fell 4%.
Investors are also worried about the diminishing prospects that Congress may soon deliver more aid to the economy. Many investors call such support crucial after extra weekly unemployment benefits and other stimulus expired. But partisan disagreements have held up any renewal.
Layered on top of all those concerns for the market is the continuing coronavirus pandemic and its effect on the global economy.
On Sunday, the British government reported 4,422 new coronavirus infections, its biggest daily rise since early May. An official estimate shows new cases and hospital admissions are doubling every week.
Prime Minister Boris Johnson later this week is expected to announce a slate of short-term restrictions that will act as a “circuit breaker” to slow the spread of the disease. The number of cases has been rising quickly in many European countries and while authorities don’t seem ready to return to the tough restrictions on public life that they imposed in the spring, the new wave of the pandemic threatens the economic outlook.