Asia Morning: U.S. Stocks Pressured by Resurging Virus Cases

,

On Wednesday, U.S. stocks lost over 2% as investors' confidence in the economic recovery was shaken by resurging coronavirus cases...

Trading floor 2

On Wednesday, U.S. stocks lost over 2% as investors' confidence in the economic recovery was shaken by resurging coronavirus cases. The U.S. recorded a one-day total of more than 36,000 new cases, the highest level since late April. California, Florida and Oklahoma reported record highs in new cases.

The Dow Jones Industrial Average tumbled 710 points (-2.7%) to 25445, the S&P 500 lost 81 points (-2.6%) to 3050, and the Nasdaq 100 was down 207 points (-2.0%) to 10002. 

Dow Jones Industrial Average: Daily Chart

Source: GAIN Capital, TradingView



Energy (-5.54%), Automobiles & Components (-4.17%) and Banks (-4.12%) sectors lost the most. 

Energy stocks such as Halliburton (HAL -8.77%) and Occidental Petroleum (OXY -9.04%) declined as oil prices plunged. Cruise companies such as Norwegian Cruise Line (NCLH -12.37%) and Royal Caribbean Cruises (RCL -11.26%) lost big. Boeing (BA -5.96%) also weighed down major indexes.  

On the technical side, about 43.1% (42.3% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 35.3% (36.3% in the prior session) were trading above their 20-day moving average.

Later today, first-quarter GDP growth (third reading, -5.0% on quarter annualized expected), Initial Jobless Claims (a fall to 1.335 million expected) and Durable Goods Orders (May preliminary reading, +10.1%  on month expected) will be reported.

European stocks were heavy on Wednesday, with the Stoxx Europe 600 Index sank 2.8%. Germany's DAX fell 3.4%, France's CAC dropped 2.9%, and the U.K.'s FTSE 100 was down 3.1%.

U.S. government bond prices increased, as the benchmark 10-year Treasury yield declined to 0.683% from 0.712% Tuesday.

Spot gold price retreated $7.00 (-0.4%) to $1,761 an ounce halting a three-session rally.

Oil prices were dragged by worries over new coronavirus cases impeding demand recovery. They came under more pressure after the Energy Information Administration reported that crude oil stockpiles increased 1.4 million barrels to another record high level last week. U.S. WTI crude oil futures (July) slid 5.8% to $38.01 a barrel.

On the forex front, the ICE U.S. Dollar Index gained 0.6% on day to 97.21, as safe-haven demand was lifted by a resurgence in coronavirus infections across the U.S..

EUR/USD retreated 0.5% to 1.1250. The German IFO Business Climate Index climbed to 86.2 in June (85.0 expected) from 79.7 in May and Expectations Index rose to 91.4 (87.0 expected) from 80.5.

GBP/USD sank 0.9% to 1.2413.

USD/JPY bounced 0.5% to 107.06.

USD/CAD advanced 0.7% to 1.3643. Canada's credit rating was downgraded to "AA+" from "AAA" at Fitch, outlook "Stable". The rating agency said "the rating downgrade reflects the deterioration of Canada's public finances in 2020 resulting from the coronavirus pandemic".

More from Commodities

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.