NEW YORK (Dow Jones) – Wall Street’s corona-related downward slide continued on Wednesday at a rapid pace. The technology sector, which had braced itself against the overall negative trend the day before, is also giving way this time. Retailers speak of increasing uncertainties about the economic development. Because the ever-new records for new corona infections have clearly led to increased state closures and restrictions on public life. Consumers are holding back, and companies are also rethinking their investments. The economic recovery is starting to stutter.
Around noon local time, the Dow Jones index lost 2.9 percent to 26,659 points, the S&P 500 and Nasdaq Composite fell 2.9 and 3.1 percent respectively. “A month ago the market was saying that the lockdowns were limited and targeted and therefore had less of an impact on the economy. But now we are seeing concerns that the lockdowns could be wider and have wider implications,” said market strategist Hugh Gimber of JP Morgan Asset Management reported the change in sentiment. In 36 US states, the hospital occupancy rate with corona patients has risen rapidly in the past seven days. In view of the gloomy outlook, it is all the more painful that politicians are not launching any further stimulus packages in the USA, added one market participant.
The reporting period does not always set the tone
The current reporting season is taking a back seat due to the focus on the corona crisis. With Microsoft, a heavyweight has reported, the titles drop by 3.9 percent. The software company exceeded market expectations in terms of profit and sales in the first quarter of the business. However, market observers point to the weaker than expected outlook for the current second period.
Boeing surrender 3.6 percent. The aircraft manufacturer slipped massively into the red in the third quarter. The loss turned out to be less than analysts feared. In view of the rapidly increasing number of infections with the coronavirus, the aircraft manufacturer is re-examining its production plans and plans to cut another 7,000 jobs by the end of next year. That is a much bigger turning point than announced in the spring.
The parcel service UPS benefited from a strong delivery volume in the third quarter. The US group increased profits and sales significantly more than expected. However, with reference to the uncertainty caused by corona, United Parcel Service (UPS) does not trust itself to make a specific forecast for the full year. The titles therefore drop by 4.4 percent.
A Corona order is supported by Eli Lilly, the papers increase by 0.9 percent. The US pharmaceutical company will provide the US government with 300,000 ampoules containing a neutralizing antibody that could be used to treat Covid-19. The deal could be worth $ 375 million. The industrial group General Electric achieved adjusted earnings per share and positive cash flow from industrial operations in the third quarter, performing better than expected. The titles are up 9.2 percent.
Fiat Chrysler lose 4 percent despite positive business figures. Analysts do not consider the automotive company to be viable without a merger with a partner like Peugeot. Akamai Technologies plunges 8.9 percent, despite the technology security-specialist company exceeding analyst expectations. Traders have little to complain about, but point to the recently announced takeover of the Irish Asavie. First Solar make a rate of 11.6 percent. The supplier of photovoltaic products is well received with its new outlook. In addition, the third quarter figures were better than expected.
Mastercard rushing 6.1 percent in depth. The financial group suffered from lower business travel in the third quarter and therefore failed to meet expectations for revenue and profit.
Dollar slows down gold price – oil smears
On the foreign exchange market, the dollar is increasing with the uncertainty caused by the corona, the ICE dollar index is gaining 0.6 percent. In times of crisis, investors continue to prefer the greenback to other currencies, it is said. The very firm dollar is making gold more expensive for investors outside the dollar area, so the price of the troy ounce drops 1.4 percent to 1,878 dollars.
Oil prices are slipping even more: The price of a barrel of US light oil of the WTI variety drops 6.1 percent to 37.15 dollars, while the European reference oil of the Brent variety is 5.5 percent lower at 38.95 dollars. The corona-related lockdowns are sparking demand. The fact that raw material stocks in the USA have risen significantly in the past week is another reason for pressure, according to data from the industry association API and the state EIA.
Despite the corona worries, the safe haven of US government bonds is only moderately in demand after the prices have already risen in the past few days. The yield on ten-year US Treasuries drops 0.2 basis points to 0.77 percent.
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INDEX last +/-% absolute +/-% YTD
DJIA 26,659.04 -2.93 -804.15 -6.59
S&P 500 3,293.21 -2.87 -97.47 1.93
Nasdaq Comp. 11,079.24 -3.08 -352.11 23.48
Nasdaq-100 11,228.58 -3.19 -370.37 28.58
US bonds
Maturity Yield Bp to VT Yield VT +/- Bp YTD
2 years 0.14 -0.1 0.15 -105.8
5 years 0.33 -0.2 0.33 -159.6
7 years 0.54 -0.2 0.55 -170.3
10 years 0.77 -0.2 0.77 -167.4
30 years 1.56 0.4 1.55 -151.0
Forex last +/-% Wed, 8:28 a.m. Tue, 5:43 p.m.% YTD
EUR / USD 1.1737 -0.37% 1.1784 1.1824 + 4.7%
EUR / JPY 122.37 -0.62% 122.70 123.51 + 0.4%
EUR / CHF 1.0690 -0.21% 1.0715 1.0724 -1.5%
EUR / GBP 0.9029 -0.16% 0.9023 0.9054 + 6.7%
USD / JPY 104.27 -0.23% 104.25 104.45 -4.1%
GBP / USD 1.2999 -0.21% 1.3056 1.3061 -1.9%
USD / CNH (offshore) 6.7331 + 0.24% 6.7149 6.7016 -3.4%
Bitcoin
BTC / USD 13,215.75 -3.83% 13,633.25 13,597.75 + 83.3%
ROHL last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 37.15 39.57 -6.1% -2.42 -34.2%
Brent / ICE 38.95 41.20 -5.5% -2.25 -36.4%
METALS last previous day +/-% +/- USD% YTD
Gold (spot) 1,877.75 1,904.70 -1.4% -26.95 + 23.8%
Silver (spot) 23.24 24.28 -4.3% -1.04 + 30.2%
Platinum (spot) 869.33 879.85 -1.2% -10.53 -9.9%
Copper future 3.05 3.09 -1.2% -0.04 + 7.9%
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Contact the author: maerkte.de@dowjones.com
DJG / DJN / raz / flf
(END) Dow Jones Newswires
October 28, 2020 11:58 ET (15:58 GMT)
