US Markets
SPX

GLOBAL MARKETS-Stocks tumble as coronavirus lockdowns loom; dollar rises

Credit: REUTERS/BRENDAN MCDERMID

Stocks sank across the globe on Wednesday on concerns that rising COVID-19 cases in Europe, the United States and elsewhere will get in the way of fragile economic recoveries, while the U.S. dollar rose on safe-haven bids.

By Rodrigo Campos

NEW YORK, Oct 28 (Reuters) - Stocks sank across the globe on Wednesday on concerns that rising COVID-19 cases in Europe, the United States and elsewhere will get in the way of fragile economic recoveries, while the U.S. dollar rose on safe-haven bids.

Benchmark Treasury yields fell alongside the price of oil 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 824.06 points, or 3%, to 26,639.13, the S&P 500 .SPX lost 98.51 points, or 2.91%, to 3,292.17 and the Nasdaq Composite .IXIC dropped 334.78 points, or 2.93%, to 11,096.58.

European shares closed at their lowest since late May as Germany and France prepared to announce restrictions approaching the level of the nationwide lockdowns in the spring, as COVID-19 deaths across Europe jumped almost 40% in a week.

The pan-European STOXX 600 index .STOXX lost 2.95%, touching its lowest level since May. MSCI's gauge of stocks across the globe .MIWD00000PUS shed 2.53%.

Asian shares lost ground after initially showing some resilience, in part due to more limited COVID-19 outbreaks and better recoveries in the region's major economies.

Emerging market stocks lost 1.18%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.66% lower, while Japan's Nikkei .N225 lost 0.29%.

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 dollar index =USD rose 0.291%, with the euro EUR= down 0.37% to $1.1751.

The Japanese yen strengthened 0.15% versus the greenback to 104.29 per dollar, while sterling GBP= was last trading at $1.2985, down 0.44% on the day.

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.

Treasury yields fell as traders moved away from risk assets.

Benchmark 10-year notes US10YT=RR last rose 2/32 in price to yield 0.771%, 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.

"Certainly 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.

U.S. crude CLc1 recently fell 5.74% to $37.30 per barrel and Brent LCOc1 was at $39.04, down 5.24% on the day.

Spot gold XAU= dropped 1.4% to $1,880.60 an ounce. Silver XAG= fell 4.68% to $23.40.

Global assetshttp://tmsnrt.rs/2jvdmXl

Global currencies vs. dollar http://tmsnrt.rs/2egbfVh

MSCI All Country Wolrd Index Market Caphttp://tmsnrt.rs/2EmTD6j

(Reporting by Rodrigo Campos; additional reporting by Medha Singh and Shivani Kumaresan in Bengaluru and Kate Duguid, Gertrude Chavez-Dreyfuss and Scott DiSavino in New York; Editing by Bernadette Baum and Mark Heinrich)

((rodrigo.campos@reuters.com; Twitter: @rodrigocampos; +1 (332) 219-1131; Reuters Messaging: rodrigo.campos.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

SPX

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More