After turning in a lackluster performance for much of the session, stocks came under pressure in the latter part of the trading day on Wednesday. The major averages slid firmly into negative territory after lingering near the unchanged line earlier in the day.
The major averages saw further downside going into the close, ending the day near their lows of the session. The Dow tumbled 344.93 points or 1.2 percent to 29,438.42, the Nasdaq slid 97.74 points or 0.8 percent to 11,801.60 and the S&P 500 slumped 41.74 points or 1.2 percent to 3,567.79.
The late-day sell-off on Wall Street came amid renewed concerns about new restrictions and lockdowns as a result of the recent surge in coronavirus cases.
A number of states are imposing new restrictions due to the spike in cases, with New York City Mayor Bill de Blasio announcing that public schools in the city will be closed as of tomorrow.
The tighter restrictions come as data from John Hopkins University showed there were nearly 162,000 new coronavirus cases and 1,707 deaths on Tuesday. The daily death toll represents a six-month high.
Concerns about the economic impact of the lockdowns overshadowed more upbeat news regarding the coronavirus vaccine candidate being developed by Pfizer (PFE) and BioNTech (BNTX).
Pfizer and BioNTech said the final efficacy analysis of an ongoing Phase 3 study of their coronavirus vaccine candidate indicated a vaccine efficacy rate of 95 percent.
The companies said that efficacy was consistent across age, gender, race and ethnicity demographics and suggested the vaccine candidate also helped to fend off severe disease.
Pfizer and BioNTech said they plan to submit a request to the FDA for an Emergency Use Authorization for the vaccine "within days."
Traders also shrugged off a report from the Commerce Department showing new residential construction spiked by more than expected in the month of October.
The report said housing starts surged up by 4.9 percent to an annual rate of 1.530 million in October after soaring by 6.3 percent to an upwardly revised rate of 1.459 million in September.
Economists had expected housing starts to jump by 3.2 percent to a rate of 1.460 million from the 1.415 million originally reported for the previous month.
With the bigger than expected increase, housing starts reached their highest annual rate since coming in at 1.567 million in February.
Sector News
Gold stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 3.7 percent to its lowest closing level in well over four months.
The sell-off by gold stocks came amid a decrease by the price of the precious metal, with gold for December delivery slumping $11.20 to $1,873.90 an ounce.
Considerable weakness also emerged among oil stocks, as reflected by the 2.4 percent drop by the NYSE Arca Oil Index. The weakness in the sector came despite an increase by the price of crude oil.
Tobacco stocks also came under pressure over the course of the session, resulting in a 2.5 percent plunge by the NYSE Arca Tobacco Index. The index reached a nearly ten-month intraday high before turning lower.
Biotechnology, natural gas and utilities stocks also moved sharply lower as the day progressed, reflecting the broad based weakness that emerged on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.1 percent, while China's Shanghai Composite Index edged up by 0.2 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index and the German DAX Index both climbed by 0.5 percent.
In the bond market, treasuries closed slightly lower after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point to 0.882 percent after hitting a low of 0.851 percent.
Looking Ahead
Trading on Thursday may be impacted by reaction to reports on weekly jobless claims, Philadelphia-area manufacturing activity and existing home sales.
For comments and feedback contact: editorial@rttnews.com
Business News