Extending the notable pullback seen over the two previous sessions, stocks moved sharply lower at the start of trading on Monday. With the initial drop, the Dow fell to its lowest intraday level in well over two months.
The major averages have subsequently climbed off their worst levels but remain firmly in negative territory. The Dow is down 864.73 points or 3 percent at 28,127.68, the Nasdaq is down 332.07 points or 3.5 percent at 9,244.52 and the S&P 500 is down 96.08 points or 2.9 percent at 3,241.67.
The sell-off on Wall Street reflects concerns about the spread of the coronavirus amid a spike in the number of confirmed cases outside of China.
South Korea announced a total of 231 new coronavirus cases earlier today, leading the government to raise the coronavirus alert to its highest level.
A jump in confirmed coronavirus cases in Italy as well as new cases in Middle East countries like Iraq and Afghanistan has raised concerns about the outbreak escalating into a pandemic.
Traders shrugged off concerns about the coronavirus earlier this month, helping propel stocks to new record highs amid optimism the outbreak would quickly be contained.
However, the continued spread of the virus along with several companies warning about the financial impact seems to have traders reassessing their positions.
Energy stocks are turning in some of the market’s worst performances in morning trading, moving sharply lower along with the price of crude oil. Crude for April delivery is plunging $2.29 to $51.09 a barrel amid concerns about the outlook for demand.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 5.7 percent, the NYSE Arca Oil Index is down by 4.6 percent and the NYSE Arca Natural Gas Index is down by 4 percent.
Substantial weakness has also emerged among steel stocks, as reflected by the 5 percent nosedive by the NYSE Arca Steel Index. The index has fallen to its lowest intraday level in over four months.
Transportation, computer hardware and semiconductor stocks are also seeing significant weakness amid a broad based sell-off on Wall Street.
Meanwhile, gold stocks are among the few groups bucking the downtrend, with the NYSE Arca Gold Bugs Index spiking by 2.6 percent to its best intraday level in well over three years.
The rally by gold stocks comes amid a spike by the price of the precious metal, as gold for April delivery is soaring $28.50 to $1,677.30 an ounce.
In overseas trading, stock markets across the Asia-Pacific region moved significantly lower during trading on Monday. Hong Kong’s Hang Seng Index plunged by 1.8 percent, while South Korea’s Kospi plummeted by 3.9 percent.
The major European markets have also shown substantial moves to the downside on the day. While the U.K.’s FTSE 100 Index has shown a 3.5 percent nosedive, the French CAC 40 Index and the German DAX Index are both tumbling by 4 percent.
In the bond market, treasuries have moved sharply higher, reflecting their appeal as a safe haven. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 10.2 basis points at 1.369 percent.
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