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Volatility-Weary Wall Street Sinks Again

Published 03/06/2020, 11:13 AM
Updated 03/06/2020, 11:14 AM
© Reuters.

By Kim Khan 

Investing.com - Volatility continued to dominate Wall Street trading Friday, with stocks lower but swinging around on a myriad of headlines regarding the global impact of Covid-19.

Investors are dealing with a disease that is rapidly spreading, government responses whose effectiveness is questionable, bureaucratic standoffs in the case of OPEC and Russia, and a real ambiguity on whether good economic data is really good news given interest rate expectations.

And the market as a whole looks genuinely baffled.

The S&P 500 fell 2.3%, the Nasdaq Composite lost 2.3% and the Dow was down 2%, or 517 points.

The major indexes were well off their early lows. Losses were trimmed after White House Adviser Larry Kudlow said the U.S. was considering fiscal stimulus measures to combat the impact of Covid-19.

Data compiled by John Hopkins University showed that there are now 233 confirmed cases in the U.S., with 14 deaths recorded, of which 12 were in a single county in Washington state.

But strategists also said the bounce could also have been triggered by short-covering or algorithmic buy orders.

Stocks opened sharply lower as selling accelerated in futures following a better-than-expected nonfarm payrolls report. The economy added 273,000 jobs in February, far more than the 175,000 expected. January’s hiring was also revised up.

While that looked like good news for the economy, it puts the Federal Reserve in a tougher position to justify more easing. That’s disappointing to an easy-money addicted market that’s calling for a further 75 basis points in rate cuts by mid-April.

The energy sector sank 3.5% as oil prices plunged more than 8% following reports that OPEC and Russia not only failed to agree on new output cuts to bolster prices, rolling over current output cuts was in question.

Among individual stocks, JPMorgan (NYSE:JPM) stock fell 5% after the bank confirmed that chairman and CEO Jamie Dimon had had to undergo heart surgery. The bank will be run jointly by its two co-chief operating officers while Dimon recovers.

Latest comments

Marco, the issue here has nothing to do with negativity, it has to do with the reality of the inorganic uptrend we've been in for way too long. This market was due for a massive correction and it has nothing to do with fear. You're right in saying that the media will continue to push undesirable news because that's what most people buy into. The fact of the matter is, the caronavirus is being used as the black sheep, so to speak, to cause blame on something for the imminent crash that was forthcoming - with or without a virus.
Dear friends, do not be obscured with news that seeks to generate an imbalance with the interests of the great, try to make the market fall, do not publish the good things but all the bad things they find. Check at this time and you will see that the market makes an effort to recover, but those who write these articles seek that that does not happen, because interest or because of reason, I do not know, but all of us are the market or we can make it positive if we want. They only sell scary news, but let's show that we are stronger than them.
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