Wall St. down for third straight day as Crypto stocks nosedive

Wall Street racked up more losses Wednesday as the stock market pulled back for the third straight day. The broad sell-off went beyond stocks, with the price of cryptocurrencies falling sharply fearing a stringent regulatory crackdown.

The S&P 500 index dropped 0.3% after recovering from a 1.6% slide earlier in the day. The benchmark index is on track for its second weekly loss in a row.

Bank stocks were among the biggest decliners. Goldman Sachs fell 1.7% and Wells Fargo lost 1.5%. A range of retailers and other companies that rely directly on consumer spending also pulled the market lower. Home Depot slid 0.7%, Gap fell 3% and L Brands dropped 3.1%.

 Cryptocurrency-related stocks led by Tesla and Coinbase witnessed a steep decline on Wednesday as bitcoin plunged and The Grayscale Bitcoin Trust, the popular trust holding a large number of bitcoins, fell about 5%.

Bitcoin at its low point of the day was down more than 30% on the session to $30,001.51, its lowest since late January but, recovered some losses in late trading climbing to somewhat around $38,000. Ethereum too plunged roughly by 25% to just below $ 2000 in the last 24 hours, though last week’s demand for the cryptocurrency sent it to an all-time. high of over $ 4200.

The move comes after China on Tuesday barred financial institutions from conducting crypto-related transactions. Separately, a JPMorgan report showed large institutional investors were dumping the cryptocurrency in favor of gold.

 Bitcoin had touched $65,000 five weeks ago before peaking, around the time of Coinbase’s public debut. The selling was so intense that the website of Coinbase was temporarily down in the morning. Coinbase’s stock dropped 5.9%, ending about 34% below the peak it reached on April 16, just two days after its IPO.

Square and Paypal — which facilitate transactions in cryptocurrencies and have been big buyers — fell on Wednesday morning before rallying back through the day. Square was down by 1.5% and PayPal made up losses to close 0.6% higher.

Nvidia, the company that manufactures chips used in crypto-mining also dropped, but recovered later with shares up 0.4%.

On the COVID front, Anthony Fauci, director of the National Institute of Allergy and Infectious Disease, said on Wednesday that the Covid-19 booster vaccine, when authorized, will likely be needed within a year following initial vaccination.

“I believe it likely will be within a year,” Fauci said during an Axios interview on vaccine rollout.

“We know that the vaccine durability of the efficacy lasts at least six months, and likely considerably more, but I think we will almost certainly require a booster sometime within a year or so after getting the primary,” Fauci said.