Wall Street tumbles to seven-week low on virus fears, stimulus fog

By Devik Jain and Shreyashi Sanyal (Reuters) - Wall Street's main indexes tumbled to their lowest in nearly seven weeks on Monday, with the Dow shedding as much as 900 points, as worries about fresh coronavirus-driven lockdowns spilled over from Europe. The CBOE Market Volatility index, a measure of investor anxiety, shot up to its highest level in nearly two weeks amid uncertainty caused by the death of U.S.

Reuters September 22, 2020 00:06:43 IST
Wall Street tumbles to seven-week low on virus fears, stimulus fog

Wall Street tumbles to sevenweek low on virus fears stimulus fog

By Devik Jain and Shreyashi Sanyal

(Reuters) - Wall Street's main indexes tumbled to their lowest in nearly seven weeks on Monday, with the Dow shedding as much as 900 points, as worries about fresh coronavirus -driven lockdowns spilled over from Europe.

The CBOE Market Volatility index, a measure of investor anxiety, shot up to its highest level in nearly two weeks amid uncertainty caused by the death of U.S. Supreme Court Justice Ruth Bader Ginsburg.

Analysts said the chances of another fiscal stimulus package from Congress to help lift the domestic economy from a recession had become grim following her death.

"It just kind of crowds out the agenda, the idea that we are going to get a fiscal stimulus package before the election," said Ed Campbell, portfolio manager and managing director at QMA in Newark, New Jersey.

"There is also just general election related jitters ... and possibly that we have a contested or delayed outcome."

Congress has for weeks remained deadlocked over the size and shape of a fifth coronavirus -response bill, on top of the approximately $3 trillion already enacted into law.

Healthcare providers came under pressure on uncertainty over the Obamacare case, with shares of Universal Health Services falling more than 11%.

Ginsburg's death can lead to a tie vote when the Supreme Court hears the challenge to the constitutionality of the Affordable Care Act (ACA) in November, brokerage Mizuho said.

Wall Street has tumbled in the past three weeks as investors dumped heavyweight technology-related stocks following a stunning rally that returned the S&P 500 and the Nasdaq to record highs.

Another round of business restrictions will threaten a nascent recovery in the wider 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. [US/]

In contrast to last week's trend, declines were led by value-oriented sectors such as industrials, energy and financials as opposed to technology stocks.

Airline, hotel and cruise companies tracked declines in their European peers as the UK signalled the possibility of a second national lockdown. Europe's travel and leisure index marked its worst two-day drop since April.

At 12:54 p.m. ET the Dow Jones Industrial Average was down 806.55 points, or 2.92%, at 26,850.87, the S&P 500 was down 73.48 points, or 2.21%, at 3,245.99 and the Nasdaq Composite was down 139.47 points, or 1.29%, at 10,653.81.

JPMorgan Chase & Co and Bank of New York Mellon Corp fell 4.4% and 5.6%, respectively, on reports that several global banks moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money.

The S&P banking subindex lost 4.5%.

Nikola Corp plunged 18.2% after its founder Trevor Milton stepped down as executive chairman following a public squabble with a short-seller over allegations of nepotism and fraud.

General Motors Co, which said it would take an 11% stake in the electric truck maker, slipped 5.7%.

Declining issues outnumbered advancers for a 9.17-to-1 ratio on the NYSE and for a 5.66-to-1 ratio on the Nasdaq. The S&P index recorded one new 52-week high and one new low, while the Nasdaq recorded 15 new highs and 47 new lows.

(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Sagarika Jaisinghani and Anil D'Silva)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.