Stocks moved sharply lower over the course of the trading day on Wednesday, more than offsetting the upward move seen over the two previous sessions. The tech-heavy Nasdaq pulled back well off yesterday’s record closing high.
The major averages climbed off their worst levels of the day but still posted steep losses. The Dow plummeted 710.16 points or 2.7 percent to 25,445.94, the Nasdaq tumbled 222.20 points or 2.2 percent to 9,909.17 and the S&P 500 plunged 80.96 points or 2.6 percent to 3,050.33.
The sell-off on Wall Street came as it seemed traders could no longer ignore the spiking number of new coronavirus cases in several U.S. states.
Fueling the renewed concerns, Florida and California both reported their single biggest daily increases in new cases of COVID-19.
Florida’s Department of Health confirmed 5,508 new cases on Tuesday, while the California Department of Public Health reported an additional 7,149 cases.
New York Governor Andrew Cuomo also announced that out-of-state visitors coming to New York, New Jersey and Connecticut from regions with high COVID-19 rates will be required to quarantine for 14 days.
A CNBC analysis of data compiled by Johns Hopkins University found the nation’s seven-day average of daily new Covid-19 cases spiked more than 30 percent compared with a week ago.
During congressional testimony on Tuesday, White House health advisor Dr. Anthony Fauci warned of a “disturbing surge” in coronavirus infections.
President Donald Trump has repeatedly blamed the jump in coronavirus cases on increased testing and doubled-down on his suggestion that testing should be slowed.
With the exception of the sharp pullback seen earlier this month, traders have largely shrugged off the concerns about the increase in coronavirus cases amid continued optimism about a quick economic recovery.
Airline stocks saw substantial weakness amid concerns about the impact of the new quarantine requirements in New York, New Jersey and Connecticut, with the NYSE Arca Airline Index crashing by 7.7 percent.
Substantial weakness was also visible among energy stocks, which moved sharply lower along with the price of crude oil. Crude for August delivery plunged $2.36 to $38.01 a barrel.
Reflecting the weakness in the sector, the Philadelphia Oil Service Index plummeted by 7.9 percent, the NYSE Arca Oil Index dove by 5.8 percent and the NYSE Arca Natural Gas Index tumbled by 4.9 percent.
Banking stocks also showed a significant move to the downside over the course of the session, dragging the KBW Bank Index down by 4.8 percent.
Steel, brokerage, chemical and networking stocks also saw considerable weakness on the day, reflecting a broad-based sell-off on Wall Street.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index edged down by 0.1 percent, while China’s Shanghai Composite Index rose by 0.3 percent.
Meanwhile, the major European markets all showed substantial moves to the downside on the day. While the German DAX Index plunged by 3.4 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index tumbled by 3.1 percent and 2.9 percent, respectively.
In the bond market, treasuries moved higher over the course of the session after seeing initial weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.5 basis points to 0.684 percent.
Trading on Thursday may be impacted by reaction to the latest weekly jobless claims report as well as data on durable goods orders in May.
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