How major USA stock indexes fared Wednesday

Friday, 26 Jun, 2020

The spectre of escalating transatlantic trade tensions threw yet even more uncertainty into the Wednesday market mix, with the USA weighing new tariffs on $3.1bn of exports from France, Germany, Spain and the United Kingdom.

Overseas, in Tokyo, the Nikkei 225 let go of 1.2% Thursday, while in Hong Kong, markets were shuttered for holiday.

Looking at the other key United States indices, the Nasdaq Composite finished the day down 222 points, just below the 10,000 point level; while the S&P 500 benchmark shed 2.59% or 80 points to close at 3,050 points. The selling followed a skid in European stock indexes. New York, New Jersey, and CT announced that they would require quarantining for visitors from outbreak hotspots Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Utah, Texas and Washington.

The rise in new infections is stoking worries that reopenings of businesses closed earlier to fight the pandemic may have to be curtailed, despite indications that economies are recovering from lockdowns that are being eased in the US and other countries. By comparison, Dow, Boeing and Exxon Mobil were the worst performing Dow stocks - down between 4.71% and 7.01%.

Also weighing on stocks, the US said it was considering imposing tariffs on $3.1 billion worth of products from the U.K., France, Germany and Spain.

"In an environment where the World Health Organization had only recently announced on Sunday a record increase in global Covid-19 cases, sentiment can certainly still turn very promptly with the flick of the switch", Jingyi Pan, a market strategist with IG in Singapore said in a report.

After coming within 5 percent of its record high in early June, the benchmark S&P 500 has lost almost 6 percent in the past two weeks and analysts cautioned further declines amid worsening economic forecasts. Norwegian Cruise Line, Carnival and Royal Caribbean Cruises all fell more than 11%.

Shares of U.S. airlines, resorts, and cruise operators slumped. Wynn Resorts lost 11% and MGM Resorts International dropped 8.3%.

The Dow Jones Industrial Average was down 675 points, or 2.6 per cent, to 25,480.

Even the tech giants are not immune to the impact of fears about COVID-19 as the Nasdaq lost 222.20 points, or 2.2%, finishing at 9,909.17, a day after booking a fresh record closing high on Tuesday.

In small caps, the Russell 2000 closed at 1,389.75 for a loss of 49.59 points or -3.45%.

The choppy start to the week comes after the S&P 500 notched its fourth weekly gain in the past five weeks.

The market has been mostly in rally mode since April as investors focused on the prospects for an economic turnaround as broad areas of the economy reopened.

New data on USA home sales Monday showed the virus outbreak continues to disrupt the US housing market.

A CNBC analysis of Johns Hopkins University data found the USA 7-day average of coronavirus cases surged more than 30% from a week ago after the total number of cases grew by more than 31,000 on Monday.

Bond yields rose, another sign of increasing confidence in the economy. "All the hopes of investors looking for a better economy to improve the bottom lines of companies shut down in the recession have been dashed".

In energy trading, benchmark USA crude oil slid 5.5 percent to $38.13 a barrel. It slid 5.8% to settle at $38.01 a barrel on Wednesday.

USA crude fell 5.85% to $38.01 per barrel and Brent was at $40.11, down 5.91% on the day. It fell 5.4% to close at $40.31.

The dollar rose to 107.17 Japanese yen from 106.90 yen late Monday.

In Asia, Hong Kong's Hang Seng Index slipped 0.5%, while India's major gauge shed 1.6%.