Business
U.S. stocks tumble as COVID 19 fears resurge
With a record surge of over a lakh cases a day in the U.S., the COVID 19 fears have resurged leading to further uncertainty of the investors in the stock market.
Wall Street stocks tumbled on Thursday as investors were unsure of the timeline for the mass production of a possible vaccine.
The blue-chip Dow.DJI was pulled down by industrial and financial companies sensitive to economic growth, with Boeing Co BA.N and Goldman Sachs GS.N down 3% and 1.6%, respectively. The travel and pleasure industry was further jostled with airlines and cruise operators, among the hardest hit by the pandemic.
The S&P 1500 airlines index.SPCOMAIR dropped 3.1%, while Royal Caribbean Cruises Ltd RCL.N fell 4% and Carnival Corp CCL.N tumbled almost 8%.
New York introduced stricter social distancing rules on Wednesday, as new infections in the country surged above 100,000 for an eighth consecutive day.
Michael Antonelli, a market strategist at Baird said, “The market is reacting to the rise in COVID cases nationwide. 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 keep President-elect Joe Biden from enacting tax hikes that would hurt corporate profits. In extended trade, Cisco Systems Inc CSCO.O jumped 8.6% after the network gear maker reported its quarterly results.
Unofficially, the Dow Jones Industrial Average.DJI fell 1.08% to end at 29,080.17 points, while the S&P 500.SPX lost 1.00% to 3,537.01.
The Nasdaq Composite .IXIC dropped 0.65% to 11,709.59.
Among the biggest boosts to the Nasdaq was a surge of 20% in the U.S.-listed shares of Chinese e-commerce company Pinduoduo Inc PDD.O after it reported strong quarterly revenue. Rival JD.com Inc’s JD.O shares climbed 4.3%.
The S&P 500 energy index .SPNY slumped 4% and materials .SPLRCM lost 2.5%.
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.
Moderna Inc MRNA.O 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 however declined to comment on plans to release the data.
“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. 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.
On U.S. exchanges, 10.3 billion shares changed hands, compared to an average of 10.0 billion shares for the last 20 sessions.
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.
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