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U.S. Stocks Move Sharply Lower, Nasdaq Pulls Back Off Record High

wallstreet july20 24jun20 lt

After moving higher over the two previous sessions, stocks have pulled back sharply in morning trading on Wednesday. The tech-heavy Nasdaq is giving back ground after ending Tuesday's trading at a new record closing high.

The major averages have seen further downside in recent trading, hitting new lows for the session. The Dow is down 511.06 points or 2 percent at 25,645.04, the Nasdaq is down 143.61 points or 1.4 percent at 9,987.76 and the S&P 500 is down 55.04 points or 1.8 percent at 3,076.25.

Profit taking has contributed to the weakness on Wall Street, as some traders worry the recovery from the March lows has been overdone.

Concerns about the rising number of coronavirus cases in a number of U.S. states are also weighing on the markets amid worries a "second wave" could delay the economic recovery.

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.

Texas, Arizona and California are among several states that have seen significant increases in coronavirus cases, with California reporting 6,219 new cases on Monday.

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.

Energy stocks are turning in some of the market's worst performances in morning trading, with a decrease by the price of crude oil weighing on the sector. Crude for August delivery is sliding $0.77 to $39.60 a barrel.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index has plunged by 4 percent, the NYSE Arca Oil Index is down by 2.8 percent and the NYSE Arca Natural Gas Index is down by 2.2 percent.

Substantial weakness has also emerged among banking stocks, as reflected by the 3 percent nosedive by the KBW Bank Index.

Housing, telecom and brokerage stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.

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 have all shown notable moves to the downside on the day. While the French CAC 40 Index has plunged by 2.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index are down by 2.3 percent and 2.4 percent, respectively.

In the bond market, treasuries have moved modestly higher over the course of the morning. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.5 basis points at 0.694 percent.

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