Major Wall Street indices hit their lowest level in nearly seven weeks on Monday, as concerns about new closures triggered by the coronavirus and Congress’s inability to agree to more fiscal stimulus sparked fears of another blow to the national economy.
All major S&P indices were down, with energy leading the declines as oil prices fell due to the possible return of Libyan production and rising coronavirus cases.
The major Wall Street indices have tumbled in the past three weeks as investors ditched tech-related heavyweight stocks after an impressive rally that returned the S&P 500 and Nasdaq to record highs.
Another round of trade restrictions will threaten a nascent recovery in the broader economy and add further pressure on equity markets, analysts said. The first round of lockdowns in March had led the S&P 500 to suffer its worst monthly decline since the global financial crisis.
“We’ve been in a dynamic commercial-type market for weeks,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, NJ.
“When the market went up, their main reason was that people wanted to get in before it went even higher. And now people are getting nervous because this year’s near-extraordinary gains will be paid back.”
Thomas Mantione, managing director of UBS Private Wealth Management in Stamford, Connecticut, said that the passing of US Supreme Court Justice Ruth Bader Ginsburg also reduces the chances of another fiscal stimulus package to help drive out the national economy from a deep recession.
“Now he has put another bargaining factor into that fiscal stimulus policy response, which makes it even less likely that it will pass before the November elections,” Mantione said.
Congress has been stuck for weeks on the size and shape of a fifth coronavirus response bill, in addition to the roughly $ 3 trillion already signed into law.
At 10:45 am ET, the Dow Jones Industrial Average was down 853 points, or 3.09%, to 26,804, the S&P 500 was down 84 points, or 2.53%, to 3,235, and the Nasdaq Composite was down 246 points, or 2.28%, at 10,547.
The CBOE Market Volatility Index, a measure of investor anxiety, soared to its highest level in nearly two weeks.
JPMorgan Chase & Co and Bank of New York Mellon Corp fell 2.6% and 1.8%, respectively, on reports that several global banks moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origin of the money. .
The S&P banking subindex lost 2.1%.
Nikola Corp plunged 17.9% after founder Trevor Milton stepped down as chief executive officer following a public dispute with a short seller over allegations of nepotism and fraud.
General Motors Co, which acquired an 11% stake in Nikola for about $ 2 billion earlier this month, fell 5%.
Airline, hotel and cruise companies saw declines in their European peers as the UK signaled the possibility of a second national lockdown. [.EU]
Issues in decline outnumbered those that advanced 8.60 to 1 on the NYSE and 5.27 to 1 on the Nasdaq
The S&P index posted a new 52-week high and no new lows, while the Nasdaq posted eight new highs and 21 new lows.
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