Reuters | Oct 28, 2020 22:25
By Rodrigo Campos
NEW YORK (Reuters) - Stocks sank across the globe on Wednesday on concerns that rising COVID-19 cases in Europe, the United States and elsewhere would disrupt fragile economic recoveries, while the U.S. dollar rose on safe-haven demand.
Crude prices fell almost 5% and gold was under pressure from the rising dollar.
On Wall Street, the energy and technology sectors of the S&P 500 were among the hardest hit.
"Whether you call it a continuation of the pandemic or a third wave of new case discovery - it is the largest concern," said Art Hogan, chief market strategist at National Securities in New York.
"Unless and until we get through this pandemic, it is hard for investors to imagine a better economic time."
The Dow Jones Industrial Average (DJI) fell 943.24 points, or 3.43%, to 26,519.95, the S&P 500 (SPX) lost 119.65 points, or 3.53%, to 3,271.03 and the Nasdaq Composite (IXIC) dropped 426.48 points, or 3.73%, to 11,004.87.
European shares closed at their lowest since late May as Germany and France ordered their countries back into lockdown, as a massive second wave of coronavirus infections threatened to overwhelm Europe before the northern winter.
Concerns over a rising wave of COVID-19 infections played out in currency and bond markets, too, with the euro (EUR=EBS) slumping against the dollar.
The Japanese yen strengthened 0.10% versus the greenback to 104.33 per dollar, while sterling
Adding to the mood of uncertainty was the Nov. 3 U.S. presidential election.
Former Vice President Joe Biden has enjoyed a consistent lead in the polls over President Donald Trump. Investors cautiously bet on his victory and a possible "blue wave" outcome, where Democrats control both chambers of Congress.
UBS strategist Vassili Serebriakov said a Biden administration would be seen as de-escalating trade tensions with traditional allies such as Europe and Canada, as well as China, which should improve market sentiment overall and weigh on the dollar as a safe haven.
Benchmark 10-year notes (US10YT=RR) last rose 1/32 in price to yield 0.7743%, from 0.778% late on Tuesday.
Escalating coronavirus infections weighed on oil prices by stoking fears of a supply glut and weaker fuel demand. Also weighing on the market, U.S. crude stockpiles rose more than expected last week.
"The increase in oil production led to an unexpected build of crude oil and, given the additional lockdowns we are seeing in Europe, that is just further heaping bad news on the oil market," said Andy Lipow, president of consultants Lipow Oil Associates.
Written By: Reuters
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