Dow dives as coronavirus resurgence fears grow in the US and China - CNN

erotoko.blogspot.com

US stocks tumbled at the opening bell in New York, with the Dow (INDU) falling 2.6%, or 660 points. Trading was volatile in the first minutes: The Dow briefly bounced back and then fell more than 700 points, or 2.8%.

The S&P 500 (SPX) and Nasdaq Composite (COMP) both also dropped sharply at the open, and traded down 2.3% and 1.7%, respectively, in the first minutes of the session.

Oil prices moved lower, also pushed down by concerns about a resurgence of the virus that could lead to lower demand. US oil prices tumbled more than 4% to $34.75 a barrel. Brent, the global oil benchmark, slipped 2.5% to $37.75 per barrel.

The US economic calendar is light this week, but the New York Manufacturing Index report for June, released Monday morning, was surprisingly strong. Economists had expected another steep decline, but it was little changed from the the prior month. The manufacturing measure collapsed in April, during the height of the lockdown, but has recovered since.

European benchmarks traded broadly lower, even after recouping some of their earlier losses. The FTSE 100 (UKX) dropped 1.5% in London. Germany's DAX (DAX) fell 1.2%, and France's CAC 40 (CAC40) also declined 1.2%.

In Asia, markets also recorded steep declines after Beijing recorded a fresh cluster of the virus originating in the city's largest wholesale food market. The Chinese capital has recorded 79 new cases since a locally transmitted infection was reported last Friday for the first time in nearly two months.

China also reported concerning economic data, suggesting that the recovery in the world's second largest economy is progressing slowly.

Japan's Nikkei (N225) ended down 3.5%. South Korea's Kospi (KOSPI) lost 4.8%, closing out its worst day since March. Hong Kong's Hang Seng Index (HSI) fell 2.1%, and China's Shanghai Composite (SHCOMP) declined 1%.

Flare-up fears

For weeks, Wall Street appeared increasingly disconnected from the rest of the world — big stock gains seemed incongruous with relatively high unemployment numbers and other data showing the economy is struggling. But markets have begun to catch up to reality, and despite a small recovery Friday, US indexes are on pace for heavy declines at the start of this week.

As much of the United States begins to reopen following coronavirus lockdowns, scientists and health experts are warning about the potential for a second wave of the virus, which could have devastating effects for the economy. Several US states that reopened weeks ago are now reporting a rising number of infections and hospitalizations.

A second wave could undermine the extreme optimism about the economy that had catapulted US stocks toward record highs. Investors worry that a rapid increase in cases could lead to delays in the reopening or possibly even another lockdown.

"Ultimately it's consumer's willingness to leave their apartments amid persistent social distancing — either mandated by governments or by consumer behavior — [that] will dictate the speed of the recovery," wrote Stephen Innes, chief global markets strategist at AxiCorp, in a research note. "But China's consumer-led recovery is not moving forward quickly by any stretch of the imagination."

In China, meanwhile, signs of another wave of the virus could compound an already sluggish economic recovery.

Industrial production, investment activity and retail sales improved somewhat from prior months, according to data released by China's National Bureau of Statistics on Monday. Still, the three readings all fell below forecasts from analysts polled by Refinitiv.

Even so, some economists pointed to positive signs. Activity in the country's services sector expanded for the first time this year, according to China's National Services Industry Manufacturing Index. The index measures the change in output of the services sector each month.

"Overall economic output returned above 2019 levels in May for the first time since the Covid-19 outbreak," Martin Rasmussen, China economist for Capital Economics, wrote in a research report. "We had previously thought that China's economy wouldn't return to positive year-on-year growth until [the third quarter]. But today's data suggest that this milestone may be reached this quarter."

— Matt Egan contributed to this report.

Let's block ads! (Why?)

"and" - Google News
June 15, 2020 at 08:55PM
https://ift.tt/2BcIdll

Dow dives as coronavirus resurgence fears grow in the US and China - CNN
"and" - Google News
https://ift.tt/35sHtDV
https://ift.tt/2ycZSIP
And

Bagikan Berita Ini