Stock Market News for Feb 28, 2020

Wall Street mayhem continues for six-straight days as the threat of coronavirus looms large on the United Sates. The Chinese economy is in jeopardy resulting in significant concern about global industrial supply chain system. All three major stock indexes maintained their southbound movements.

The Dow Jones Industrial Average (DJI) plunged 4.4% or 1,190.95 points to close at 25,766.64. The S&P 500 plummeted 4.4% or 137.63 points to close at 2,978.76. Meanwhile, the Nasdaq Composite Index closed at 8,566.48, shedding 4.6% or 414.29 points. A total of 15.63 billion shares were traded Thursday, higher than the last 20-session average of 8.67 billion. Decliners outnumbered advancers on the NYSE 7.51-to-1 ratio. On Nasdaq, a 5.87-to-1 ratio favored declining issues.  

How Did The Benchmarks Perform?

The Dow closed in negative territory with 29 of the 30 components of the blue-chip index closed in the red while 1 ended in the green. The major loser of the Dow was Microsoft Corp. MSFT. The Zacks Rank #1 (Strong Buy) company tanked 5.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The benchmark S&P 500 ended in the red with each of its 11 sectors posted losses. The Real Estate Select Sector SPDR (XLRE) and the Energy Select Sector SPDR (XLE) tanked 5.7% and 5.4%, respectively. Meanwhile, the tech-laden Nasdaq Composite finished in the red driven by stiff fall in large-cap stock prices.

Wall Street Mayhem Continues

Wall Street is correcting itself during the last six trading days. On Feb 27, California Governor Gavin Newsom said the state is currently monitoring an estimated 8,400 people over COVID-19 concerns that have arrived in California from Asia. The state has confirmed 33 positive cases of coronavirus.

On Feb 27, the three major stock indexes – the Dow, the S&P 500 and the Nasdaq Composite – tumbled 4.4%, 4.4% and 4.6%, respectively. All three indexes are currently under correction territory (a range defined as a decline of 10% but not more than 20% from its recent high).  

The Dow plummeted 1,190.95 points, marking its historically largest single-day decline point-wise. This was the steepest single-day decline of Dow since Feb 5, 2018, whereas both the S&P 500 and the Nasdaq Composite recorded biggest single day drop since Aug 18, 2011.

Year to date, all three indexes are in negative territory with a loss of 9.7%, 7.8% and 4.5% for the Dow, the S&P 500 and the Nasdaq Composite, respectively. Notably, in the first four trading days of this week, the Dow plunged 11.13%, the S&P 500 plummeted 10.8% and the Nasdaq Composite tumbled 10.55%. The Dow, the S&P 500 and the Nasdaq Composite are currently within the top 15, 20 and 7 weekly decline of the index’s history, respectively.

Meanwhile, on Fed 27, The CBOE VIX — which reflects S&P 500 option bets to calculate expectations for volatility over the coming 30 days — jumped 42.1% to close at 39.16. This was the volatility index’s highest close since February 2018. Notably, in the last six trading days, the VIX - popularly recognized as Wall Street’s best fear gauge – skyrocketed 172.3%.

Economic Data

The U.S. government reaffirmed the fourth-quarter 2019 GDP growth rate at 2.1% in its second estimate. However, consumer spending - the biggest component of the GDP - dropped to 1.7% from 1.8% reported earlier. Meanwhile, government expenditure rose 3.2% in the prior quarter. Fixed business investment, excluding housing, fell 2.3% compared with 1.5% reported earlier. Notably, inflation rate also lowered to 1.3% from 1.6%.

The Department of Labor reported that initial claims for jobless Americans rose 8,000 to a seasonally adjusted 219,000 for the week ended Feb 22, surpassing he consensus estimate of 212,000. Notably, previous week’s data was revised upward to 211,000 from 210,000. However, the continuing claims fell 9,000 to 1.72 million.

The Department of Commerce reported that U.S. durable goods (factory-made manufacturing goods) declined 0.2% in January, lower-than the consensus estimate of a decline of 1.1%.  December’s data was revised upward to a gain of 2.9% from 2.4% reported earlier. Year over year, durable goods orders declined 2.3%.

However, core durable goods orders (orders for nondefense capital goods excluding aircraft) jumped 1.1% in January after declining December and being flat in November. This was a key metric as it was closely associated with business investment plans.

Stocks That Made Headline

EOG Resources Q4 Earnings Top Estimates, Reserves Grow

EOG Resources Inc. EOG delivered fourth-quarter 2019 adjusted earnings per share of $1.35, beating the Zacks Consensus Estimate of $1.16. (Read More)

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Microsoft Corporation (MSFT): Free Stock Analysis Report
EOG Resources, Inc. (EOG): Free Stock Analysis Report
To read this article on click here.

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


More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.