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Dow Slides as Virus Surge Threatens Recovery

Stock MarketsNov 12, 2020 04:04PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow fell Thursday as a wave of red washed over stocks linked to the economic recovery on worries about the impact of the further restrictions in the U.S. amid a record surge in coronavirus cases.

The Dow Jones Industrial Average fell 1.1%, or 317 points. The S&P 500 was down 1.01%, while the Nasdaq Composite dropped 0.65%.

As the U.S. witnessed a record-high 145,835 cases Wednesday, parts of the country are re-imposing economy-sapping restrictions to curb the virus. The threat of renewed lockdown measures has triggered investor jitters about the impact to the pace of the recovery.

"Although the lockdowns that were widespread over the spring don't seem likely to repeat, we expect that many local governments will quickly enact policies that attempt to limit the spread at the expense of promoting economic activity which could lead to a new round of layoffs," Jefferies (NYSE:JEF) said in a note following the jobless claims report released Thursday.

In the week ended Nov. 7, 709,000 people filed for unemployment insurance, down 48,000 from the prior week's upwardly revised 757,000, and better than the expected 730,000 claims expected.

Major cities in the U.S. including Boston, New York, and Chicago have recently announced restrictions and curfews on hospitality to stem the jump in cases.  

Adding to the worries about further lockdown measures, Federal Reserve Chairman Jerome Powell warned that the economy will be challenged in the next several months by the resurgence in the virus.

Energy, meanwhile, led the rout in value stocks as an unexpected build in U.S. crude weekly stockpiles exacerbated the selling.

Crude oil inventories rose 4.3 million barrels, according to the Energy Information Administration. The expectation was for a draw of 913,000 barrels.

Materials and financials also came under pressure, with the latter taking a blow from retreating bank stocks following a surge earlier this week on positive vaccine news.

JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Citigroup (NYSE:C) were down 1%.

Tech, which a day earlier had offset losses in value stocks, was on the backfoot. Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) Alphabet (NASDAQ:GOOGL) and Microsoft  (NASDAQ:MSFT) ended in the red.

In other news, Moderna (NASDAQ:MRNA) stoked hopes that preliminary data for its Covid-19 vaccine candidate could be released soon after it topped the number of coronavirus cases needed in its late-stage vaccine study to submit the preliminary data to an independent review board. Its shares rose more than 6%.

Dow Slides as Virus Surge Threatens Recovery
 

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Comments (13)
New Jazenevd
New Jazenevd Nov 12, 2020 7:44PM ET
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Stock investors are supposed to look a bit further than daily market oscillations. In more long term market has much better chance to move higher, esp. if Reps keep Senate. Biden should be able to move stimulus through Rep Senate, but he will not be able to push higher taxes through it. In result, market will be the main winner.
Ben Ramirez
Ben Ramirez Nov 12, 2020 6:40PM ET
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Prepare for the Big Dip.
Jesse Mulliniks
Jesse Mulliniks Nov 12, 2020 6:27PM ET
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RIP Chad Bulls
Thom Miller
Thom Miller Nov 12, 2020 6:07PM ET
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Greg Nathan has recently served as a temporary, middle-school math teacher, and currently, (during this Covid-19, pandemic environment,) works from home as a half-time, FuelEd Math Instructor for the Springfield Public Schools. At the same time, Nathan works from home supplementing his income by unsuccessfully trading the stock market and posting absolute dribble about Donny Trump on the https://investing.com website.
Jin News
Jin News Nov 12, 2020 5:58PM ET
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Funny! when the markets were up just a few days ago the virus was just as bad
Taylor Huddlestun
Taylor Huddlestun Nov 12, 2020 5:07PM ET
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Biden wants to stick to the science. Well the SCIENCE says less then .05% actually die directly from the virus. The rest are prior conditions. Sorry, but the world cannot stop functioning for those with prior conditions like you sleepy Joe
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Joanne Sushames
Joanne Sushames Nov 12, 2020 5:07PM ET
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I hope your attitude doesnt come and *****you in the bum as there are a lot more issues than that I hope you have no family with preexisting conditions and not all people who die dont die from this have any quality of life after, you need to look at the big picture if you all had worn masks and social distance yourselves it would have gotten to a measure you could have a life as we have here in Australia, but no you have taken the hard road and believe me it IS the HARD road!!!!!
Joanne Sushames
Joanne Sushames Nov 12, 2020 5:07PM ET
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whether they dieor now they are a real drain on the medical system and also tell that to the 250,000 + families who have lost a loved one, if all you are worried about is the stock market you are a sad person
Fernando Lazarini
Fernando Lazarini Nov 12, 2020 5:07PM ET
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Joel Schwartz  hahahah good one, dude. That´s true.
New Jazenevd
New Jazenevd Nov 12, 2020 5:07PM ET
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Fernando Lazarini  It is true only if mental pre-existing conditions add up to the count.
Celeste Awesome
Celeste Awesome Nov 12, 2020 5:07PM ET
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The world has stopped whether you like it or not, we are not the only country in the world. The whole world is in this together, we can work together to resolve it if we come together! This is not a stop, this is a pause. Also silver lining the more it crashes the cheaper we can get everything and ride up. So if you know what you’re doing it would not matter what is happening because you will make money either way. Take care and stay safe!
New Jazenevd
New Jazenevd Nov 12, 2020 4:43PM ET
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Market consolidated today, quite normal process. Also, biden will not be able to introduce lockdowns until February and, moreover, by that point lockdowns would not be in his interest. It is one thing to talk about lockdowns and another to try them.
Matthias Mol
Mati987 Nov 12, 2020 4:39PM ET
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Vaccine hopes have already hit, better change the headline!Be quick though, as virus fears might return back in the nightly session.I truly don't need to read the news anymore as markets going up = vaccine hopes, stimulus hopes, and markets going down = virus fears, recovery doubts. An AI could do the same job.
Steffen vdm
Steffen vdm Nov 12, 2020 4:39PM ET
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Tomorrow Friday the 13th. Just saying...
Joel Schwartz
Joel Schwartz Nov 12, 2020 4:34PM ET
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Anyone else worried about 10-yr bond falling 10.5% today? Just me? Cool.
Manas Bi
Manas Bi Nov 12, 2020 4:16PM ET
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s&p should fell by 6%
DrFunkenstein hayson
DrFunkenstein hayson Nov 12, 2020 4:16PM ET
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dow slides because it is massively overvalued and disconnected from reality. there i fixed your title. the virus is a fraud
Jesse Mulliniks
Jesse Mulliniks Nov 12, 2020 4:13PM ET
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This will all end badly
Celeste Awesome
Celeste Awesome Nov 12, 2020 4:13PM ET
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Your outlook determines your outcome
 
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