Wall Street slips as concerns rise of stricter China COVID curbs; Tesla down over 6%

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Wall Street’s main indexes ended broadly on Monday on fears that China could reintroduce strict measures to fight COVID-19, as it said it faces its most severe test of the pandemic.

Beijing said on Monday it would close businesses and schools in badly affected districts and tighten rules for entry into the city, as infections soared higher.

“There is a fear that China could re-impose some of the COVID restrictions that they have just started to lift,” said Carol Schleff, deputy chief investment officer at BMO Family Office.

US casino operators with businesses in China, including Wynn Resorts Ltd, Las Vegas Sands Corp, MGM Resorts International, and Melco Resorts & Entertainment Ltd declined at least 2%.

The Dow Jones Industrial Average fell 45.41 points, or 0.13%, to 33,700.28, the S&P 500 fell 15.4 points, or 0.39%, to 3,949.94 and the Nasdaq Composite fell 121.55 points, or 1.09%, to 11,024.51.

Trading volume was low on Monday, and is expected to be lower on Thursday heading into the Thanksgiving holiday, raising the risk of volatility in the markets.

Volume on US exchanges stood at 9.43 billion shares compared to an average of 11.88 billion shares for the entire session over the past 20 trading days.

“If you want to take a little profit on some concerns over spikes in Covid cases, that’s fine,” said Jack Jansiewicz, lead portfolio strategist and portfolio manager at Natixis Investment Managers Solutions. “It gets really difficult because of the volume.”

Shares were lower in the early afternoon after San Francisco Federal Reserve President Mary Daly commented that officials needed to be careful to avoid a “painful recession”.

Cleveland Fed President Loretta Mester echoed Daly in saying she favors a smaller rate hike in December.

The S&P 500 energy sector index fell nearly 3% on Monday to its lowest level in four weeks as oil prices plunged more than 5% after reports that Saudi Arabia and other OPEC oil producers are discussing production increases. I. However, the index trimmed losses after Saudi Arabia ruled out talks about it.

Energy was the only major S&P 500 sector gainer for the year, gaining nearly 63%.

The Walt Disney Co jumped 6.30% following the return of Bob Iger as chief executive of the entertainment giant.

The S&P 500 extended its declines from last week after several Federal Reserve officials reiterated the central bank’s pledge to raise rates in a check on inflation, as investors now await the release of minutes from the Fed’s November meeting on Wednesday. .

Traders are widely betting on a 50-basis point hike at the December meeting, with a peak for rates expected in June.

In other stocks, Tesla Inc fell 6.84% after the electric-car maker said it would recall vehicles in the United States over an issue that could cause taillights to illuminate intermittently.

Gay dating app Grindr plunged 46.00% in the previous session amid broader market weakness after skyrocketing on its debut on the New York Stock Exchange.

Issues declining compared to issues advancing on the NYSE by a 1.27-to-1 ratio; On the Nasdaq, a 1.60-to-1 ratio favored declines.

The S&P 500 posted 9 new 52-week highs and 2 new lows; The Nasdaq Composite recorded 96 new highs and 220 new lows.

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