Dow falls sharply as coronavirus fears grow
Rising Covid-19 infections around the world as the colder seasons of the year are beginning are also weighing on the market.
The Dow (INDU) was down more than 800 points, or 3%. The broader S&P 500 (SPX) was down 2.5%. The Nasdaq Composite (COMP) was down 2.3%.
All three indexes have posted three-straight weeks of losses. This week could be number four.
European stock markets don’t look better Monday, selling off as virus numbers are on the rise.
While stocks are getting hammered, the US dollar, measured by the ICE US Dollar Index is up 0.7%. US Treasury bonds are also in high demand Monday, and the 10-year bond yield dipped to 0.65%. Bond prices and yields move opposite to one another.
The market jitters began with a sharp selloff, primarily in tech stocks, a few weeks back. Since then, supportive monetary stimulus from the Federal Reserve, gridlock in Washington over a next stimulus bill, the impending election and the lack of viable investment alternatives after the big stock market rally of the summer have been pulling investors into different directions.
“Sentiment in the US is also worse following Friday evening’s death of Supreme Court Associate Justice Ruth Bader Ginsburg,” wrote Macquarie global interest rates and currencies strategist Thierry Wizman in a note to clients.
Washington is now arguing about whether a judge to fill Ginsburg’s seat should be voted on before the election or after. In the latter case the stakes in the presidential election become even higher and could make it more likely that the result will be contested, Wizman said.
