Stock market: New York and Toronto worried about pace of recovery

(Photo: Getty images)

–

MARKET REVIEW. The New York Stock Exchange ended at half mast on Tuesday, with new lockdowns in Europe and rising coronavirus cases dampening hopes of a rapid global recovery.

The Toronto Stock Exchange also retreated, as the energy and materials sectors lost feathers with commodity prices.

The clues

In Toronto, the index S&P/TSX dropped 145 points, or 0.77%, to 18,669 points.

In New York, the S&P 500 fell 30 points, or 0.76%, to 3,910 points.

The Dow Jones fell 308 points, or 0.94%, to 32,423 points.

The Nasdaq lost 149 points, or 1.12%, to 13,227 points.

The context

Exactly one year ago, the stock market hit its bottom at the height of the health crisis caused by the coronavirus. The S&P 500 had lost 35% since its peak a month earlier.

On Tuesday, the virus was recalled to the memory of the New York place with the announcement by Germany of a new prolonged confinement because of an increased spread of the disease.

“One has the impression that concerns related to the virus, which had ebbed in recent weeks, are again suffocating the market and pushing some investors to be more cautious,” said JJ Kinahan for TD Ameritrade.

“This week has started with more concern in Europe, where the progress of vaccination is lagging behind and where some countries like Germany are closing their doors,” he added.

As the time for quarter-end portfolio rebalances nears, Treasuries have attracted investors, pushing back yields which fell to 1.62% for 10-year T-bills from 1.62%. 69% the day before. At the same time the dollar has risen sharply.

Investors listened to Jerome Powell, President of the Central Bank (Fed) who, during a congressional hearing, insisted on the need to continue supporting the economy which is “far from fully recovered” from the crisis. recession caused by the pandemic.

And he once again downplayed the risks of uncontrolled inflation, insisting that the Federal Reserve had the tools to deal with it.

At the same time, Janet Yellen, Secretary of the Treasury, also auditioned, confirmed that the Biden administration intended to increase corporate taxes to meet the financing needs of a gigantic stimulus package.

During the presidential campaign, Joe Biden proposed to raise the corporate tax rate from 21% to 28% and to increase the taxes of individuals earning more than 400,000 dollars a year.

In terms of actions, Microsoft climbed 0.67% as the IT giant is in preliminary discussions, according to the press, for the takeover of the messaging platform Discord, for more than 10 billion dollars.

The stocks that had recently benefited from the hopes of the recovery have lost ground like the cruise line Carnival (-7.82%); airlines American Airlines and United Airlines dropped out almost 7%.

The giant of machine tools and construction equipment Caterpillar dropped 3.44%.

– .