Wall Street hits the brakes

July 14, 2020 - 3 weeks ago
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U.S. shares were trading lower on Monday after Wall Street hit the brakes after traders and investors got a painful reminder that the coronavirus cases had continued to increase.

California’s Governor Gavin Newsom ordered state-wide closure of all indoor operations at restaurants, bars, movie theatres, zoos and museums, with other businesses like gyms and hair salons being required to close their doors in counties on the state’s watch list following a recent spike in coronavirus cases.

Florida had more new cases in one day than the entire U.S. did in about two months.

Florida reported its highest number of new COVID-19 cases in one day – 15,300 on Saturday, according to data from Johns Hopkins University.

That’s a new record for the latest cases in a single day from any state – including New York state earlier in the pandemic.

It took the entire United States 59 days to top 15,000 combined cases – from January 21 to March 20.

It also took the entire US more than two months from the start of the outbreak to top 15,000 new cases in a single day.

That happened on March 26, when the US had 18,036 new cases in a single day, according to Johns Hopkins data.

Meanwhile, the head of the World Health Organization has warned that the COVID-19 pandemic is worsening, and things will not return to “the old normal” for some time.

WHO director-general Tedros Adhanom Ghebreyesus told a press conference on Monday that “there will be no return to the old normal for the foreseeable future”.

Wall Street rallied earlier after traders reacted positively to more upbeat news regarding a potential coronavirus vaccine.

Besides the announcements from Companies Pfizer (PFE) and German biotech firm BioNTech (BNTX), U.S. biopharmaceutical company Gilead Sciences Inc’s said its coronavirus treatment candidate, Remdesivir, “was associated with an improvement in clinical recovery and a 62% reduction in the risk of mortality compared with standard of care.”

Meanwhile, if the ongoing studies are successful and the vaccine receives regulatory approval, Pfizer and BioNTech expect to manufacture up to 100 million doses by the end of 2020 and potentially more than 1.2 billion doses by the end of 2021.

After trading in positive territory for much of the day, the Standard and Poor 500 and Nasdaq Composite Index closed lower at the finishing bell, on the New York Stock Exchange (NYSE).

The rich-tech Nasdaq Composite Index plummeted -226.60 points, or -2.1%, to close at 10,390.84, after setting a new intraday record at the start of trading of 10,824.78.

Technology stocks took the hardest hits, highlighted by Microsoft’s swing from an early gain of -1% to a loss of -3.1%, while tech giants like Netflix, Amazon and Facebook also showed substantial downturns after reaching new record intraday highs.

Shares of Tesla, the electric carmaker, had a particularly wild ride on Monday after surging more than +16% to a new all-time high of $1,794.99, before giving back those gains and falling into negative territory during afternoon trading and ended down -3.08% to $1,497.06.

The Standard and Poor 500 index fell -29.82 points or -0.94% to 3,155.22, meanwhile, the Dow Jones Industrial Average eked out a +10.50-point gain, or +0.04%, to end at 26,085.80.

Elsewhere, investors have also been keeping an eye on threats of renewed U.S. and China tensions after President Donald Trump said on Friday that there was no scope for a phase-two agreement on trade between the two countries, saying Washington’s relationship with China had been “severely damaged” by the coronavirus pandemic, which the administration has sought to blame on Beijing.

China’s move to crack down on Hong Kong with the passage of strict new national security laws has also raised tensions.

Meanwhile, traders will be waiting for the U.S. reporting season which kicks off on Tuesday evening with CitiGroup’s second-quarter results.

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