Stocks Slump on Bank Probe, Virus Woes; Bonds Rise: Markets Wrap
(Bloomberg) — Stocks slumped to a two-month low amid growing concern over tighter coronavirus restrictions and as a report detailed suspicious transactions at global banks. Treasuries and the dollar climbed.
The S&P 500 dropped for a fourth day — its longest losing streak since February — with commodity, industrial and financial shares leading declines. JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. sank at least 3%, while Carnival Corp. and American Airlines Group Inc. paced losses in travel companies. Nikola Corp. plunged as its founder stepped down in the wake of regulatory probes and a short seller’s allegations that the electric-truck startup misled investors. Oil slid after Libya signaled the resumption of some crude exports. Silver and gold tumbled.
As U.S. deaths related to Covid-19 approached 200,000, former Food and Drug Administration Commissioner Scott Gottlieb said he expects the nation to experience “at least one more cycle” of the virus in the fall and winter. Germany’s health minister warned that the trend of cases in Europe is “worrying” amid expectations that restrictions could soon be extended to London. President Donald Trump said he wants his looming Supreme Court pick confirmed before the Nov. 3 election, escalating pressure on Senate Republicans as he seeks to protect his most vulnerable members.
“Maybe there are worries we will see another wave of lockdowns. We also have U.S. political risk rising,” according to Jeffrey Kleintop, chief global investment strategist at Charles Schwab Corp. “There are some concerns there could be more fines in place on financial-services institutions,” and that could further hit earnings estimates, he said.
Speculative investors are souring on the outlook for U.S. technology stocks. Positioning in Nasdaq-100 mini futures is the most bearish since April 2008, the latest Commodity Futures Trading Commission data show. High-flying tech shares could remain under pressure until lingering optimism still evident in options bets normalizes, according to Julian Emanuel, a strategist at BTIG LLC.
These are some of the main moves in markets:
- The S&P 500 decreased 2.2% as of 11:12 a.m. New York time.
- The Stoxx Europe 600 Index sank 3.2%.
- The MSCI Asia Pacific Index slid 1.1%.
- The Bloomberg Dollar Spot Index jumped 0.8%.
- The euro decreased 0.8% to $1.1749.
- The Japanese yen was unchanged at 104.57 per dollar.
- The yield on 10-year Treasuries decreased four basis points to 0.66%.
- Germany’s 10-year yield fell five basis points to -0.53%.
- Britain’s 10-year yield fell three basis points to 0.156%.
- West Texas Intermediate crude fell 4.6% to $39.21 a barrel.
- Gold depreciated 2.5% to $1,901.72 an ounce.
- Silver sank 8% to $24.64 per ounce.