(New York) The New York Stock Exchange on Wednesday suffered its largest drop since June, undermined by the likely impact on the economy of the second wave of COVID-19 and new containment measures announced in Europe.
Posted on October 28, 2020 at 9:41 a.m.
Updated at 4:13 p.m.
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The three indices dropped together well over 3% in the wake of the rout of the European stock markets.
Its flagship index, the Dow Jones Industrial Average, finished down 3.43% to 26,519.95 points, its biggest drop since June and its lowest level since early August.
NASDAQ, with strong technological coloring, sank 3.73% to 11,004.86 points, the lowest for more than a month.
The S&P 500 extended index also dropped 3.53% to 3271.03 points.
Faced with the exponential leap of the COVID-19 epidemic, French President Emmanuel Macron announced Wednesday evening in Paris a partial re-containment from Friday with closures of bars and restaurants but also non-essential stores, as well as a return to the widespread teleworking.
The New York indices, which had already opened strongly in the red, accelerated their losses after the French announcement.
Germany has also imposed drastic measures for a month to stem the second wave of the coronavirus, accompanied by economic aid of 10 billion euros. In Italy, unpopular “semi-containment” measures sparked protests on Monday.
“The market is waking up to reality,” commented Karl Haeling of LBBW.
This return of health restrictions in Europe “raises the risk that the same thing could happen in the United States in a few weeks”, he continued adding that “the key will be” the situation of hospitalizations “.
No sector was spared by the decline, especially not tech stocks, reflecting the fact that we are witnessing “a large liquidation on the market, investors are leaving” “added Karl Haeling.
The new coronavirus pandemic has killed at least 1,168,750 worldwide and more than 44 million people have been infected, according to a report established by AFP on Wednesday from official sources.
In the United States, “investors are grappling with three main headwinds,” summed up Art Hogan, strategist for National Holdings: “the increase in COVID-19 cases with an average of 70,000 new cases per week for the first time […], the fact that there was no fiscal stimulus and finally the uncertainty of the presidential election ”. We are in effect less than a week before the US election on November 3.
“Hospitalizations linked to COVID-19 climbed by at least 10% last week in 32 US states”, the analyst added.
Big tech stocks plunged like Amazon (-3.76%), Apple (-4.63%), Facebook (-5.51%) and Tesla (-4.39%).
On the S&P, all sectors tumbled, from the health sector (-3.22%) to banks (-2.47%), via energy (-4.22%) while the prices of the oil plunged more than 5%.
In the bond market, the 10-year rate on the US debt reversed the trend during the day, going up a little, to 0.7727% against 0.7676% Tuesday night.
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