Stocks moved significantly lower over the course of the trading session on Tuesday, giving back ground following the strong upward move seen in recent days. The Nasdaq reached a new record intraday high in morning trading but eventually joined the Dow and S&P 500 in negative territory.
The major averages saw further downside going into the close, ending the session near their worst levels of the day. The Dow plunged 396.85 points or 1.5 percent at 25,890.18, the Nasdaq slumped 89.76 points or 0.9 percent to 10,343.89 and the S&P 500 tumbled 34.40 points or 1.1 percent to 3,145.32.
The weakness that emerged on Wall Street came as a lack of major U.S. economic data allowed concerns about the coronavirus pandemic to resurface.
The renewed coronavirus concerns came as World Health Organization officials warned that the death toll from the pandemic may start to climb again.
The death toll has fallen in recent weeks despite the spike in new coronavirus cases in certain areas, but the WHO officials noted there is a lag between when a person contracts the disease and when they become seriously ill and potentially die.
“I don’t think it should be a surprise if the deaths start to rise again. It will be very unfortunate, but it may happen,” said Dr. Mike Ryan, Executive Director of the WHO Health Emergencies Programme.
Adding to the concerns, New York and New Jersey have added Delaware, Kansas and Oklahoma to the list of states from which travelers are required to self-quarantine for 14 days.
Atlanta Federal Reserve President Raphael Bostic also warned that the spike in coronavirus cases in southern and western states could slow the U.S. economic recovery.
Bostic noted in an interview with the Financial Times that high-frequency data had shown a “leveling off” of economic activity both in terms of business openings and mobility.
“There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise,” Bostic said.
Profit taking may also have contributed to the pullback on Wall Street after the Nasdaq and S&P 500 closed higher for five consecutive sessions.
Airline stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Airline Index down by 4.2 percent.
Significant weakness also emerged among oil stocks, as reflected by the 3.8 percent nosedive by the NYSE Arca Oil Index.
The sell-off by oil stocks came even though the price of crude oil closed nearly flat for the second straight day, with crude for August delivery edging down $0.01 to $40.62 a barrel.
Banking stocks also moved sharply lower over the course of the trading session, resulting in a 3.3 percent slump by the KBW Bank Index. The index ended the session at its lowest closing level in well over a month.
Computer hardware, networking and oil service stocks also came under pressure over the course of the session, while considerable strength remained visible among gold stocks.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index fell by 0.4 percent, while China’s Shanghai Composite Index rose by 0.4 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the U.K.’s FTSE 100 Index tumbled by 1.5 percent, the German DAX Index slumped by 0.9 percent and the French CAC 40 Index slid by 0.7 percent.
In the bond market, treasuries moved moderately higher over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.4 basis points to 0.650 percent.
News on the coronavirus front may continue to attract attention on Wednesday amid another quiet day on the U.S. economic front.
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