Profit Taking Leads To Early Sell-Off On Wall Street
Stocks moved sharply lower early in the trading day on Friday, giving back ground after moving sharply higher over the past few sessions. The pullback on the day comes after the Dow recorded its biggest three-day spike since 1931.
The major averages have moved roughly sideways in recent trading, stuck firmly in negative territory. The Dow is down 919.78 points or 4.1 percent at 21,632.39, the Nasdaq is down 278.34 points or 3.6 percent at 7,519.20 and the S&P 500 is down 97.74 points or 3.7 percent at 2,532.33.
Profit taking contributed to the early weakness on Wall Street, as some traders looked to cash in on the strong gains seen in recent days.
Lingering concerns about the economic impact of the coronavirus are also weighing on the markets, as the number of confirmed cases in the U.S. surpasses the number of cases in China or Italy.
According to data from Johns Hopkins University, there have been more than 86,000 confirmed coronavirus cases in the U.S. and 1,300 deaths.
Adding to the negative sentiment, the University of Michigan released a report showing consumer sentiment deteriorated by much more than initially estimated in the month of March.
The report said the consumer sentiment index for March was downwardly revised to 89.1 from the preliminary reading of 95.9.
The consumer sentiment index is now down sharply from the final February reading of 101.0, reflecting the fourth largest one-month decline in nearly a half-century.
Meanwhile, traders are also keeping an eye on the latest developments in Washington, where the House is scheduled to vote on the $2 trillion stimulus bill passed by the Senate late Wednesday.
With many members currently stuck at home, House Democratic leaders hope to pass by the bill by voice vote but could face challenges if there are any objections.
Energy stocks are turning in some of the market’s worst performances in morning trading, with the NYSE Arca Oil Index and the Philadelphia Oil Service Index plunging by 6.5 percent and 5.6 percent, respectively.
The weakness among energy stocks comes amid a steep drop by the price of crude oil, as crude for May delivery is slumping $1.20 to $21.40 a barrel.
Considerable weakness is also visible among computer hardware stocks, which are giving back ground after moving sharply higher on Thursday.
Housing, financial, steel and networking stocks are also seeing significant weakness, moving sharply lower along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index surged up by 3.9 percent, while Hong Kong’s Hang Seng Index rose by 0.6 percent.
Meanwhile, the major European markets have shown substantial moves back to the downside on the day. While the U.K.’s FTSE 100 Index has plummeted by 5.8 percent, the French CAC 40 Index is down by 4.6 percent and the German DAX Index is down by 3.6 percent.
In the bond market, treasuries are extending the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.2 basis points at 0.749 percent.
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