In this news, we discuss the Stocks tumble as coronavirus lockdowns loom; dollar rises.
NEW YORK (Reuters) – Shares sank across the world on Wednesday amid fears that rising COVID-19 cases in Europe, the United States and elsewhere could hamper the fragile economic recovery, while the US dollar increased on shelter offers.
Yields on benchmark Treasuries have fallen alongside the price of oil and gold has come under pressure from the rising dollar.
On Wall Street, the energy and tech sectors of the S&P 500 were among the hardest hit.
“Whether you call this a continuation of the pandemic or a third wave of discovery of new cases, that’s the biggest concern,” said Art Hogan, chief market strategist at National Securities in New York City.
“Unless and until we get through this pandemic, it’s hard for investors to imagine better economic times.”
The Dow Jones Industrial Average fell 824.06 points, or 3%, to 26,639.13, the S&P 500 lost 98.51 points, or 2.91%, to 3,292.17 and the Nasdaq Composite fell 334 , 78 points, or 2.93%, at 11,096.58.
European stocks closed at their lowest level since late May, as Germany and France prepared to announce restrictions approaching the level of national lockdowns in the spring, as deaths from COVID-19 across Europe jumped almost 40% in one week.
The pan-European STOXX 600 index lost 2.95%, hitting its lowest level since May. MSCI’s stock gauge across the world fell 2.53%.
Asian stocks lost ground after initially showing some resilience, in part due to more limited outbreaks of COVID-19 and better recovery in major economies in the region.
Emerging market equities lost 1.18%. The MSCI’s largest Asia-Pacific stock index outside of Japan closed 0.66% lower, while Japan’s Nikkei lost 0.29%.
Concerns about a growing wave of COVID-19 infections have also surfaced in currency and bond markets, with the euro collapsing against the dollar.
The dollar index rose 0.291%, with the euro down 0.37% to $ 1.1751.
The Japanese yen strengthened 0.15% against the greenback to 104.29 per dollar, while the British pound last traded at $ 1.2985, down 0.44% on the day.
The US presidential election on November 3 added to the atmosphere of uncertainty.
Former Vice President Joe Biden has enjoyed a steady lead in the polls over President Donald Trump. Investors are wagering cautiously on his victory and a possible outcome of the “blue wave,” where Democrats control both houses of Congress.
UBS strategist Vasily Serebriakov said a Biden administration would be seen as a de-escalation of trade tensions with traditional allies such as Europe and Canada, as well as China, which should improve overall market sentiment and weigh on the dollar as a safe haven.
Yields on Treasuries fell as traders moved away from risky assets.
The benchmark 10-year notes last rose 2/32 of the price to a yield of 0.771%, up from 0.778% on Tuesday night.
Escalating coronavirus infections have weighed on oil prices by fueling fears of an oversupply and weaker demand for fuel. Also weighing on the market, US crude inventories rose more than expected last week.
“It is certain that the increase in oil production has led to an unexpected build-up of crude oil and, given the additional lockdowns we are seeing in Europe, this is just bad news in the oil market,” said Andy Lipow, president of Lipow Oil Associates consultants.
US crude recently fell 5.74% to $ 37.30 a barrel and Brent was at $ 39.04, down 5.24% on the day.
Spot gold fell 1.4% to $ 1,880.60 an ounce. Silver fell 4.68% to $ 23.40.
Reporting by Rodrigo Campos; additional reporting by Medha Singh and Shivani Kumaresan in Bengaluru and Kate Duguid, Gertrude Chavez-Dreyfuss and Scott DiSavino in New York; Editing by Bernadette Baum and Mark Heinrich
Original © Thomson Reuters