S&P 500 falls into worst rout in nearly two months

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Shares fell in the United States and Europe as rising coronavirus infections and tougher lockdowns added to concerns about the economic blow from the pandemic.The S&P 500 Index fell about 3%, heading for the largest drop since early September, amid an increase in hospitalizations related to COVID-19, particularly in the Midwest. Energy stocks fell along with oil prices, and tech stocks were also among the worst performers.

Boeing Co. fell to a month-long low as it announced plans for more job cuts. Microsoft Corp. was among the biggest drag on the S&P 500, with investors focusing on a forecast lower than analysts’ highest expectations, beyond a decidedly bullish earnings and sales report. General Electric Co. won after reporting a surprise profit.

The Stoxx Europe 600 index fell to its lowest level in five months and fell more than 3% after German Chancellor Angela Merkel reached agreement for a month-long partial lockdown to curb the spread of the virus . Auto and real estate stocks saw the steepest declines.

Haven’s assets, such as Treasuries and German bunds, rose. The VIX Index, a measure of the volatility of US stocks, hit its highest level since June.

Markets in the United States and Europe have fallen sharply this week as cases of the virus increase and U.S. lawmakers fail to agree on an economic aid package ahead of the November 3 election. Analysts are also warning of increased market volatility ahead of the presidential election and after the election, with some saying a contested outcome is still possible.

“As you see the cases increase and decrease in activity across the country, this translates directly into an impact on GDP growth,” said Phil Toews, managing director of asset manager Toews Corp. “The lack of fiscal stimulus means unemployed people who were able to keep buying things will no longer be able to do so. ”

Elsewhere, oil has fallen sharply due to worrying lockdowns that will undermine demand. Bitcoin experienced its biggest drop in almost two months after hitting its highest level since January 2018.

In Asia, equities performed better. The MSCI Asia-Pacific Index edged down on Wednesday, and markets in South Korea and Shanghai posted modest gains. In China, indicators monitored by Bloomberg showed that the recovery continued to display mixed signals while remaining broadly stable in October.

Here are the main movements in the markets:

Stocks

The S&P 500 Index fell 2.9% at 11:06 a.m. New York time.
The Stoxx Europe 600 index fell 3.3 percent.
The MSCI Asia-Pacific index fell 0.5%.

Devises

The Bloomberg Dollar Spot Index rose 0.6%.
The British pound fell 0.4 percent to US $ 1.2995.
The Japanese yen gained 0.1 percent to 104.27 per dollar.

Obligations

The yield on 10-year Treasuries fell one basis point to 0.76%.
Germany’s 10-year yield fell one basis point to -0.63 percent.
Britain’s 10-year yield fell one basis point to 0.22 percent.

Basic products

West Texas Intermediate crude sank 5.3 percent to US $ 37.47 a barrel.
Gold fell 1.6% to US $ 1,876.79 an ounce.



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