Wall Street rises at open following four-day rout

Marco Green
February 28, 2020

Technology stocks again led the decline. The S&P 500 and Nasdaq are now more than 10 per cent below their intraday record highs hit on February 19 while the Dow Jones Industrials is 10 per cent off its February 12 peak. All three indices closed down more than 10% from their recent highs, meaning that they are now in a correction.

The steep drop in financial markets could put a dent in consumer confidence and spending - a major driver of the US economy. Volatility spiked, sending the Cboe's measure of equity gyrations surging by the most since 2018. If the indexes end at these levels, it would confirm a correction. "But right now, people don't know how or when we're going to get there, and what people do in that situation is to retrench".

The outbreak has the potential to become a pandemic and is at a decisive stage, the head of the World Health Organization said Thursday.

Bank of America slashed its global growth forecast to the lowest since the peak of the financial crisis. And Wall Street's expectations for profit growth are sliding away. Saudi Arabia banned foreign pilgrims from entering the kingdom to visit Islam's holiest sites.

Which of these is the biggest risk for Canada's economy?

U.S. Dollar Index falls 0.4% to 98.65.

Markets are pricing a roughly even chance the Federal Reserve will cut interest rates next month and have nearly fully priced in a cut by April.

Losses continue to mount as investors weigh each gloomy headline on the virus.

The U.S. saw its first possible case of community spread on Wednesday.

"The way the market is going down, it's happening pretty quickly, but it's very hard to say that it's over", said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute.

Stock prices are monitored at the New York Stock Exchange, Wednesday, Feb. 26, 2020.

Japan industrial production, jobs, and retail sales figures are due on Friday.

The losses extend a weeklong rout that has brought the S&P 500 8.8% below the record high it set just a week ago. NY time, hitting the lowest in 15 weeks with its sixth consecutive decline.

The Dow Jones Industrial Average plummeted 1,190 points Thursday, or more than 4%, as economic uncertainty over the spread of the novel coronavirus continued to rattle markets.

MSCI's gauge of stocks across the globe shed 1.31%. The Dow dove 1,193 points, or 4.4%, to 25,763.

The pan-European STOXX 600 index lost 3.75%, for a more than 10% drop from its record closing high set last week.

Gold, sought as a safe-haven, jumped 1%. Energy stocks fell sharply as the price of oil dropped 3.4%.

"This is a market that's being driven completely by fear", said Elaine Stokes, portfolio manager at Loomis Sayles, with market movements following the classic characteristics of a fear trade: stocks are down, commodities are down and bonds are up.

Other reports by Click Lancashire

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