U.S. Continue To See Substantial Weakness After Early Nosedive

After an early sell-off triggered another “circuit breaker” trading halt, stocks continue to see astonishing weakness in mid-day trading on Thursday. The major averages have all moved sharply lower, with the Nasdaq and the S&P 500 joining the Dow in bear market territory.

Currently, the major averages are lingering near their worst levels of the day. The Dow is down 2,107.88 points or 9 percent at 21,445.34, the Nasdaq is down 641.84 points or 8.1 percent at 7,310.21 and the S&P 500 is down 223.96 points or 8.2 percent at 2,517.42.

Concerns about the impact of the coronavirus continue to weigh on the markets after President Donald Trump addressed the nation about the outbreak last night.

Trump was likely seeking to calm the markets but has instead exacerbated concerns by announcing a ban on all travel from Europe to the U.S. for the next 30 days.

The president’s remarks also created some confusion, as he initially said the prohibitions would apply to trade and cargo before subsequently tweeting that trade “will in no way be affected.”

Trump also announced plans to address the economic impact of the outbreak, although some investors have complained about a lack of specifics.

Reflecting the widespread impact of the outbreak, the NBA has suspended its season after an all-star player tested positive for the coronavirus.

Oscar-winning actor Tom Hanks revealed that he and his wife, actress Rita Wilson, have also tested positive in Australia.

The coronavirus concerns have overshadowed the day’s economic data, including a report from the Labor Department showing an unexpected drop in initial jobless claims in the week ended March 7th.

A separate report from the Labor Department showed producer prices declined by much more than expected in the month of February amid a steep drop in energy prices.

Sector News

Most of the major sectors have shown substantial moves to the downside on the day, reflecting another broad based sell-off on Wall Street.

Oil stocks are turning in some of the market’s worst performances in mid-day trading, with the NYSE Arca Oil Index plunging by 12.1 percent to a sixteen-year low intraday low.

The continued weakness among oil stocks comes as the price of crude oil for April delivery is tumbling $1.55 to $31.43 a barrel.

Substantial weakness is also visible among steel stocks, as reflected by the 12.8 nosedive by the NYSE Arca Steel Index. The index has plummeted to its lowest intraday level in four years.

Gold stocks are also seeing significant weakness amid a steep drop by the price of the precious metal, moving sharply lower along with housing, banking and computer hardware stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Thursday. Japan’s Nikkei 225 Index plunged by 4.4 percent, while China’s Shanghai Composite Index tumbled by 1.5 percent.

The major European markets have tanked over the course of the session. While the U.K.’s FTSE 100 Index has cratered by 10.5 percent, the German DAX Index is down by 12.1 percent and the French CAC 40 Index is down by 12.5 percent.
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In the bond market, treasuries have pulled back well off their highs of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.1 basis points at 0.799 percent after hitting a low of 0.638 percent.

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