Dow headlong 900 points as coronavirus fears mount

BreaknLinks
 BreaknLinks
-New York

Image: (Craig Ruttle/AP)

In a painful start to the week for the Dow and the border market, stocks headlong Monday as investors worry when Washington will agree with another stimulus bill.

The Dow was down more than 900 points, or 3.3%. The broader S&P 500 was down 2.5%. Both the Dow and the S&P are flirting with falling into correction territory, which is defined as a 10% drop from this peak.

The Nasdaq Composite, the only index of the three that currently is in correction territory, was down 2%. All major stock benchmarks have posted three-straight weeks of losses. This week could be number four.

While stocks are getting hammered, the safe-haven US dollar, measured by the ICE US Dollar Index is up 0.9%. US Treasury bonds, also a safe investment, are also in high demand Monday, and the 10-year bond yield dipped to 0.66%. Bond prices and yields move opposite to one another.

Rising Covid-19 infections around the world as the colder seasons of the year are beginning are also weighing on the market.

Investors are growing increasingly worried about renewed lockdowns in the winter while the economic recovery from the pandemic remains fragile. European stock markets don't look better Monday, selling off as virus numbers are on the hike. There are reasons for investors to be bullish on US stocks right now.

For one, the Federal Reserve has committed to keeping interest rates lower for longer, which is good for companies looking to borrow money.

Many strategists also believe that Wall Street remains the most attractive stock market to invest in. Will everything be fine, right? Not so fast: There are plenty of clouds on the horizon.

Market experts have warned that volatility will be high towards the end of the year and around the election, especially because many expect the winner won't be known immediately.

The market has been jittery for weeks, starting with a sharp selloff, primarily in tech stocks, that was a rude awakening after the summer market rally.

Publish : 2020-09-21 23:38:46

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