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U.S. Stocks Remain Sharply Lower After Early Sell-Off

wallstreet1 061318 27mar20 lt

After moving sharply lower early in the session, stocks continue to see substantial weakness in mid-day trading on Friday. The pullback on the day comes after the Dow recorded its biggest three-day spike since 1931.

Currently, the major averages continue to post steep losses on the day. The Dow is down 811.87 points or 3.6 percent at 21,740.30, the Nasdaq is down 250.53 points or 3.2 percent at 7,547.01 and the S&P 500 is down 85.36 points or 3.3 percent at 2,544.71.

Profit taking contributed to the early weakness on Wall Street, as some traders looked to cash in on the strong gains seen in recent days.

Lingering concerns about the economic impact of the coronavirus are also weighing on the markets, as the number of confirmed cases in the U.S. surpasses the number of cases in China or Italy.

According to data from Johns Hopkins University, there have been more than 86,000 confirmed coronavirus cases in the U.S. and 1,300 deaths.

Adding to the negative sentiment, the University of Michigan released a report showing consumer sentiment deteriorated by much more than initially estimated in the month of March.

The report said the consumer sentiment index for March was downwardly revised to 89.1 from the preliminary reading of 95.9.

The consumer sentiment index is now down sharply from the final February reading of 101.0, reflecting the fourth largest one-month decline in nearly a half-century.

Meanwhile, traders are also keeping an eye on the latest developments on Capitol Hill, where the House is scheduled to vote on the $2 trillion stimulus bill passed by the Senate late Wednesday.

Members of Congress are reportedly rushing back to Washington after Kentucky Republican Rep. Thomas Massie threatened to oppose the bill, preventing it from passing by voice vote.

Sector News

Energy stocks continue to turn in some of the market's worst performances in mid-day trading, with the NYSE Arca Oil Index and the Philadelphia Oil Service Index plunging by 5.8 percent and 6.5 percent, respectively.

The weakness among energy stocks comes amid a steep drop by the price of crude oil, as crude for May delivery is slumping $1.20 to $21.40 a barrel.

Substantial weakness also remains visible among computer hardware stocks, which are giving back ground after moving sharply higher on Thursday.

Steel, brokerage, chemical, and transportation stocks are also seeing significant weakness amid broad based selling pressure on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index surged up by 3.9 percent, while Hong Kong's Hang Seng Index rose by 0.6 percent.

Meanwhile, the major European markets have shown substantial moves back to the downside on the day. While the U.K.'s FTSE 100 Index has plummeted by 5.4 percent, the French CAC 40 Index is down by 4.5 percent and the German DAX Index is down by 3.5 percent.

In the bond market, treasuries are extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.3 basis points at 0.738 percent.

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