Wall St Slumps On Virus, Stimulus Worries

By Glenn Dyer | More Articles by Glenn Dyer

As Victoria emerges from its lockdown, the situation is worsening in Europe and the US as second and now third waves of COVID-19 overwhelm health systems, hospitals, and the US elections.

Figures out yesterday show that 60 million Americans have already voted – either via postal ballots or pre-poll voting at regular voting centres.

That’s many times more than four years ago with analysts citing the rising tide of COVID infections forcing people to vote early and safely rather than vote in large numbers on November 3.

That nervousness is now infecting sharemarkets on both sides of the Atlantic as shares in Europe and the US slumped on Monday.

That pushed the ASX 200 index down for a sharp fall of around 70 points at the opening here this morning.

Rising coronavirus cases in the United States and Europe, the tightening of restrictions across Europe, and the continuing stalemate on more stimulus spending from Congress and the Trump White House.

At the close the Dow has fallen by 2.29% or 650 points, the S&P 500 lost 1.8% or 64 points and the Nasdaq was down 1.6% or 189 points.

“Fears about COVID-19 resurgence and the continued failure to reach a fiscal policy package between Republicans and Democrats has investors unnerved,” Michael Arone, chief investment strategist at State Street Global Advisors in Boston told Reuters.

The market suffered larger falls during trading – the Dow was down more than 800 points at one stage and the S&P 500 and Nasdaq were off more than 2.2% as well.

ASX 200 futures were down 1.2% or 59 points, at the market re-opening this morning. That was better than the 71 point fall at 6 am.

The S&P 500 fell more than 2.5 percent, on track for its sharpest daily decline since late September. Added to a small weekly decline last week, the drop on Monday means the S&P 500 is close to erasing all of its gains from earlier in October.

Shares in Europe were also lower as more restrictions were introduced to try to combat the second wave of the coronavirus pandemic. In Spain, the government declared a state of emergency and imposed a nighttime curfew. In Italy cinemas and gyms are closing and indoor dining now ends at 6pm. In France, a six-week curfew for most of the country began on Friday.

The Stoxx Europe 600 index fell 1.8% as all major markets fell by more than 1% – except Germany’s Dax which slumped 3.7%. Earlier, Asian markets fell (except for Hong Kong) with the ASX 200 losing 11 points to close at 6,156.

Commodities were weak – gold lost $US1.80 an ounce to settle at $US1,900.20 on Comex in New York while copper fell to $US3.09 a pound, down 1.09%.

West Texas Intermediate oil fell 3.3% in New York to less than $US39 a barrel – $US38.54, while in Europe Brent crude also lost 3.3% to settle at $US40.38. Oil lost ground despite the closure of oil and gas fields in parts of the Gulf of Mexico (including by BHP) ahead of Hurricane Theta.

And the price of 62% Fe fines delivered to northern China fell 84 cents to end at $US114.63 a tonne.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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