S&P 500 falls into worst stock market rout in four months

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 3.5%, the biggest drop since June, amid a surge in hospitalizations linked to COVID-19, particularly in the Midwest. Energy stocks fell along with oil prices, and tech stocks were also among the worst performers, Microsoft Corp. being down after a disappointing forecast. The VIX Index, a measure of expected volatility in US stocks, hit its highest level since June.

The U.S. and European stock indexes are both down more than 5% this week as cases of the virus increase and U.S. lawmakers have failed to agree on an economic aid package ahead of the election. November 3. Analysts are also warning of heightened volatility before and after the presidential election, with some saying a contested outcome remains a worrying possibility.

“We obviously have the elections hanging over our heads. Then obviously COVID is accelerating to the point that it has both here in the United States and in Europe, ”said Lori Heinel, deputy general manager of investments at State Street Global Advisors. “And then you have the lack of stimulus, which we believe is still needed to get us through this time until we have an ultimate medical solution. This is the triple whammy right now.

The Stoxx Europe 600 index fell to its lowest level in five months, losing 3% when German Chancellor Angela Merkel struck a deal for a one-month partial lockdown to curb the spread of the virus. After the market closed, France imposed a new nationwide lockdown.

Elsewhere, oil fell sharply, fearing raging infections could squeeze demand. The dollar surged and gold fell. An exchange-traded fund that tracks rotten listed corporate bonds fell to a one-month low. Bitcoin headed for its biggest drop in a month.

In Asia, equities performed better. The MSCI Asia-Pacific Index edged down and the 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 2.8 percent at 4 p.m. New York time.
The Stoxx Europe 600 index fell 3%.
The MSCI Asia-Pacific index fell 0.5%.

Devises

The Bloomberg Dollar Spot Index rose 0.6%.
The British pound fell 0.5 percent to US $ 1.2981.
The Japanese yen gained 0.1 percent to 104.35 per dollar.

Obligations

The yield on 10-year Treasury bills was little changed at 0.77%.
Germany’s 10-year yield fell one basis point to -0.63 percent.
Britain’s 10-year yield fell two basis points to 0.21%.

Basic products

West Texas Intermediate crude sank 5.6 percent to US $ 37.36 a barrel.
Gold fell 1.6% to US $ 1,878.26 an ounce.