Stocks moved sharply lower over the course of the trading day on Wednesday, more than offsetting the strength seen in the previous session. With the drop on the day, the major averages ended the session at their lowest closing levels in well over a month.
The major averages saw further downside going into the close, finishing the day just off their worst levels. The Dow tumbled 525.05 points or 1.9 percent to 26,763.13, the Nasdaq plummeted 330.65 points or 3 percent to 10,632.99 and the S&P 500 plunged 78.65 points or 2.4 percent to 3,236.92.
The sell-off on Wall Street came amid renewed weakness among technology stocks, as reflected by the particularly steep drop by the tech-heavy Nasdaq.
Big-name tech companies like Netflix (NFLX), Apple (AAPL), Amazon (AMZN) and Alphabet (GOOGL) all showed significant moves to the downside.
Concerns about surging coronavirus cases in certain parts of the world may also have weighed on the markets even as President Donald Trump indicated the U.S. would not follow the U.K.’s lead and implement a second round of lockdowns.
“The U.K. just shut down again. They just announced that they’re going to do a shutdown, and we’re not going to be doing that,” Trump told Fox 2 Detroit on Tuesday. “We understand the disease, we understand how to handle it.”
In other coronavirus-related news, Johnson & Johnson (JNJ) announced it has begun a phase 3 trial of its coronavirus vaccine candidate.
Meanwhile, Federal Reserve Chair Jerome Powell, continuing to testify before Congress for the second day, said the U.S. Congress and the Federal Reserve both need to “stay with it” in working to bolster the economic recovery.
Despite progress in rebounding from the coronavirus economic downturn, “there is a long way to go,” with millions still jobless compared to where the economy was in February, he said.
“We need to stay with it … The recovery will go faster if there is support coming both from Congress and the Fed,” Powell said.
With the elections looming, lawmakers are expected to continue to have difficulty reaching an agreement on a new coronavirus relief bill.
Gold stocks moved sharply lower on the day, dragging the NYSE Arca Gold Bugs Index down by 6.3 percent to its lowest closing level in over two months.
The sell-off by gold stocks came amid a steep drop by the price of the precious metal, with gold for December delivery plummeting $39.20 to $1,868.40 an ounce.
Substantial weakness was also visible among energy stocks, which came under pressure despite a modest increase by the price of crude oil.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 6.3 percent and the NYSE Arca Oil Index tumbled by 4.5 percent.
Housing stocks also showed a significant move to the downside on the day, resulting in a 4 percent slump by the Philadelphia Housing Sector Index.
Networking, software, retail and commercial real estate stocks also saw considerable weakness, moving sharply lower along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, although Japan’s Nikkei 225 Index bucked the uptrend and edged down by 0.1 percent. China’s Shanghai Composite Index rose by 0.2 percent, while Australia’s S&P/ASX 200 Index spiked by 2.4 percent.
The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index surged up by 1.2 percent, the French CAC 40 Index climbed by 0.6 percent and the German DAX Index rose by 0.4 percent.
In the bond market, treasuries closed modestly lower after ending the previous session little changed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.2 basis points to 0.676 percent.
Trading on Thursday may be impacted by reaction to reports on weekly jobless claims and new home sales as well as additional testimony from Powell.
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