Shares fell on Wednesday morning amid a continued rise in COVID-19 cases in the US and Europe has heightened investor concerns over the economic recovery
The Dow Jones Industrial Average
DJIA,
-320%
slipped 720 points, or 26%, to trade near 26744, while the S&P 500
SPX,
-309%
lost 89 points, or 26%, to 3,301 The Nasdaq composite
COMP,
-317%
fell 327 points, or 29%, to 11104 The three indices are now negative for the month of October
Wednesday’s losses come after the Dow Jones fell on Tuesday 22,219 points, or 08%, to end at 2746319, as the S&P 500 fell 029 points, or 03%, to end at 339068 The Nasdaq Composite resisted the downward trend upwards 7,241 points, or 06%, to close at 1143135
Shares have come under pressure this week as Germany and France weighed in further restrictions on business activity to contain rising COVID-19 cases and the US as number of new ones cases reach records
The number of new US cases climbed back to above 70,000 daily on Tuesday after hitting a record high above 80,000 late last week The US reported a record 500,000 cases in the past week, The New York Times reported, while the seven-day average of new confirmed cases hit a record 69,967 on Monday, according to a Wall Street Journal analysis of data from Johns Hopkins University
« In 36 states, the hospitalization rate for coronavirus has increased by at least 5% in the past seven days, » said David Madden, market analyst at CMC Markets « Traders are monitoring hospitalization rates as authorities want to make sure health services aren’t overwhelmed – which can often be a trigger for tighter restrictions »
Jitters ahead of November Three presidential elections, now less than a week away, also contributed to volatility, analysts say Democratic challenger Joe Biden has maintained a lead over President Donald Trump in the polls, but the race has tightened An uncertain or contested election result would be the worst-case scenario, analysts say
Meanwhile, the CEOs of Alphabet IncS
GOOG,
-486%
GOOGL,
-493%
Google, Facebook Inc
FB,
-422%,
and Twitter Inc
TWTR,
-366%
will appear before a Senate Trade Subcommittee hearing titled « Does Radical Section 230 Immunity Allow Big Tech Bad Behavior? »
Investors also continue to go through the busiest week of the earnings season, including better-than-expected results Tuesday night from software giant Microsoft Corp
MSFT,
-407%,
although the company’s forecast is lower than estimated Stocks were down 36% in early trade
The recent pullback « does reflect weakening near-term momentum, » said Katie Stockton, market technician and founder of Fairlead Strategies, but on Wednesday the market had generated its first « oversold » reading since the bottom of at the end of September, Stockton tells MarketWatch The key level it is monitoring is 3357 for the S&P 500 index
Longer term, an uptrend is still intact, Stockton said The market is larger on the one hand And some of the scariest gauges like a spike in the VIX
VIX,
1868%,
which is up 33% this week, really just reflects sentiment, she thinks « It should reassure some people that a day like this might not be the best day for s. ‘run out and sell it all Don’t panic Let the market take hold and show us where it’s going to close «
Stockton also believes that the FANMAG companies’ earnings of the week reports could help the market through this difficult period « If their profits are well received, this could be a catalyst to pull major indices out of their slump »
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On Wednesday, the government said the trade deficit narrowed to $ 79.4 billion in September Economists polled by MarketWatch had forecast it to rise to $ 83.5 billion from $ 82.9 billion a month earlier
In global equities, the Shanghai Composite
SHCOMP,
045%
closed 05% higher, while the Hong Kong Hang Seng index
HSI,
-031%
and the Japanese Nikkei 225 index
NIK,
-028%
both refused 03% The Stoxx 600 Europe pan-European
SXXP,
-312%
and the London FTSE 100
UKX,
-307%
were both down 28%
Oil futures sank, with US benchmark
CL00,
-475%
down 6% to trade close to $ 37 17 a barrel as rising coronavirus cases hurt demand expectations Gold futures
GCZ20,
-185%
were down 19%, to $ 1,876 20 an ounce, as the dollar gained
The ICE US Dollar Index
DXY,
058%
a measure of the currency against a basket of six big rivals, was up 07%
The yield on the 10-year Treasury bill
TMUBMUSD10Y,
0755%
was 2 basis points lower at 0756%, as traders piled on assets perceived to be safer Bond yields and prices move in opposite directions
Read more: Something good in 2020? ‘January effect’ could come early, strategists say
The September quarter will be the last without a contribution from sales of the new iPhone 12 lineup, but the results could still surprise
William Watts is the Senior Markets Writer of MarketWatch Based in New York, Watts writes on stocks, bonds, currencies and commodities including oil He also writes on global macroeconomic issues and strategies for trading Before moving to New York he worked for MarketWatch in Frankfurt, London and Washington, DC
Andrea Riquier reports on housing and banking services in the MarketWatch New York press room Follow her on Twitter @ARiquier
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World news – US – US stocks drop, Dow drops more than 700 points, as COVID cases increase
