Inventories close almost 3% due to the surge in coronaviruses which brings blockages in the southern states

0
65


NEW YORK – Major Wall Street indices fell on Friday as several US states imposed trade restrictions in response to an increase in coronavirus cases.Several US states that have been spared the first coronavirus epidemic or have taken early action to lift restrictions are seeing a resurgence of new infections. On Friday, Texas and Florida ordered the bars closed.

“You are seeing a fairly dramatic increase in cases,” said Kevin Grogan, managing director of investment strategy at Buckingham Strategic Wealth in St. Louis. “If people started to feel like they weren’t eating outside or shopping again, it could have a really negative impact on the stock market.”

A Wall Street Journal report that the China-US trade deal may be at risk has put additional pressure on US stocks. According to the report, Chinese authorities have warned that “interference” in Hong Kong and Taiwan could lead Beijing to renounce its commitment to buy American agricultural products.

“He added another newspaper to the fire of risk aversion,” said Edward Moya, senior market analyst at OANDA in New York, of the China report.

Among the sectors, financials, communications services and energy outperformed the entire S&P 500 down. Bank stocks fell after the Federal Reserve limited dividend payments and prohibited share buybacks until at least the fourth quarter after its annual stress test.

Renewed concerns over the new coronavirus pandemic have threatened to derail a strong rally for Wall Street that wiped out much of the heavy losses from the S&P 500 from March. During Friday’s session, the S&P 500 traded below its 200-day moving average, an indicator of long-term momentum.

The spike in coronavirus cases likely triggered a test of this technical level, said Jim Paulsen, chief investment strategist at the Leuthold Group in Minneapolis.

Unofficially, the Dow Jones Industrial Average fell 732.97 points, or 2.85%, to 25,012.63, the S&P 500 lost 74.9 points, or 2.43%, to 3,008.86 and the Nasdaq Composite fell 258.92 points, or 2.58%, to 9,758.08. The TSX lost 257 points to 15,188.

Facebook Inc shares fell after Unilever PLC and Verizon Communications Inc joined an advertising boycott that called on the social media giant not to do enough to stop the hate speech on its platforms.

Nike Inc shares fell, the shoe maker, injured by store closings due to the pandemic, posted a surprise quarterly loss.

Gap Inc.’s shares soared after the retail chain struck a 10-year deal with rapper and fashion designer Kanye West to create a clothing line under its Yeezy brand.

Friday also marked the reconstitution of the FTSE Russell indices, including the large-cap Russell 1000 and the small-cap Russell 2000.

© Thomson Reuters 2020

LEAVE A REPLY

Please enter your comment!
Please enter your name here