June 23, 2021

Politics & News

Politics and Commentary News Aggregator

U.S. Stocks Close Lower Amid Concerns About Spiking Coronavirus Cases

3 min read
Latest Commentary Online Magazine

Latest Commentary delivers political news and commentary articles.

Extending the trend seen over the past couple sessions, stocks turned in a lackluster performance for much of the trading day on Friday before showing a significant move late in the session. The major averages came under pressure in late-day trading, closing firmly in negative territory.

The major averages finished the session near their worst levels of the day. The Dow slid 219.75 points or 0.8 percent to 29,263.48, the Nasdaq fell 49.74 points or 0.4 percent to 11,854.97 and the S&P 500 dropped 24.33 points or 0.7 percent to 3,557.54.

For the week, the major averages turned in a mixed performance. While the Nasdaq inched up by 0.2 percent, the Dow and the S&P 500 fell by 0.7 percent and 0.8 percent, respectively.

The weakness on Wall Street reflected concerns about the near-term economic outlook amid a continued spike in new coronavirus cases in the U.S.

The latest data from John Hopkins University showed nearly 188,000 new coronavirus cases on Thursday, while the daily death toll topped 2,000 for the first time.

The continued surge in new cases, hospitalizations and deaths in the U.S. has raised concerns new restrictions and lockdowns will dampen the economy recovery.

While there continues to be upbeat news on the vaccine front, traders seem worried about an economic downturn the months leading up to the widespread distribution of a vaccine.

Adding to the economic uncertainty, Treasury Secretary Steven Mnuchin announced a decision to allow five of the Federal Reserve’s nine emergency lending programs to expire at the end of the year.

The Fed responded to the decision in a rare public statement, saying it would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for the still-strained and vulnerable economy.

While Mnuchin has argued he is following the intent of Congress, Gregory Daco, Chief U.S. Economist at Capital Economics, suggested the Treasury Secretary is hoping lawmakers will consider reallocating the unused funds for new stimulus measures.

“However, with partisanship in Congress preventing the delivery of urgently needed fiscal aid, and low rates negating any imminent debt servicing concern, Mnuchin’s justification appears poorly grounded,” Daco said.

He added, “And, it may backfire by leaving the Fed as the only adult in the room to address a concerning economic situation in the final stages of 2020.”

Sector News

Tobacco stocks moved sharply lower over the course of the trading session, dragging the NYSE Arca Tobacco Index down by 1.9 percent. The index continues to give back ground after reaching a nearly ten-month intraday high on Wednesday.

Substantial weakness was also visible among airline stocks, as reflected by the 1.7 percent drop by the NYSE Arca Airline Index. The pullback came after the index ended Thursday’s trading at its best closing level in well over eight months.

Banking, oil service and transportation stocks also showed notable moves to the downside on the day, while most of the other major sectors showed more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific once again turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index fell by 0.4 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index edged up by 0.3 percent, the German DAX Index and the French CAC 40 Index both climbed by 0.4 percent.

In the bond market, treasuries extended the upward move seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.5 basis points to 0.829 percent.

Looking Ahead

News on the coronavirus front may continue to be in the spotlight next week, although traders are also likely to keep an eye on reports on consumer confidence, durable goods orders, personal income and spending, and new home sales.

Retailers Abercrombie & Fitch (ANF), Best Buy (BBY), Tiffany (TIF), and Gap (GPS) are also among the companies due to report their quarterly results next week.

For comments and feedback contact: editorial@rttnews.com

2020-11-20 16:25:43

Read more from source here…

Leave a Reply

Copyright © All rights reserved. | Newsphere by AF themes.