new York The surge in new coronavirus infections in parts of the United States has put a temporary end to the Wall Street rally. The US standard value index Dow Jones closed 2.7 percent lower on Wednesday to 25,445 points. The technology-heavy Nasdaq dropped 2.2 percent to 9909 points. The broad S&P 500 lost 2.6 percent to 3050 points.
However, they were still well above their March lows. The Nasdaq even hit a record high on Tuesday and the S&P 500 is heading for its biggest quarterly gain since 1975.
“There is strong opposition to the reintroduction of the pandemic restrictions,” said Craig Erlam, market analyst at the Oanda brokerage firm. “But ultimately the government will probably have no choice. Some U.S. states have had record new infections in the past few days.
At the same time, the US government is considering new punitive tariffs on European goods. “Apparently, US President Donald Trump is arguing with Europe to distract US citizens from the health situation in their own country,” said analyst David Madden from online broker CMC Markets.
The lower economic forecasts of the International Monetary Fund (IMF) also depressed sentiment. For 2020, the experts now forecast an economic slump in the United States of eight percent. With this in mind, the US government is considering another stimulus package.
Oil gives way, gold rises to eight-year highs
The fading hope for a rapid and vigorous recovery of the economy from the pandemic effects was reflected in the oil price. The US variety WTI fell by almost six percent to $ 38.14 a barrel (159 liters). The papers of the oil companies Exxon and Chevron each lost more than four percent in their wake.
Some investors fled to “safe havens”. The “anti-crisis currency” gold gained up to 0.7 percent and, at $ 1779.06 per troy ounce (31.1 grams), was as expensive as it was last almost eight years ago. “It is a foregone conclusion that the key interest rates will remain at a low level for a long time,” explained trader Alexander Zumpfe from the precious metals specialist Heraeus. “This benefits gold, which itself pays no interest and is considered inflation protection.”
Leisure values under pressure
For fear of a further tightening of the corona restrictions, investors rose in tourism and leisure values. The shares of the airlines American, Delta and United Airlines, the casino operator Wynn and Las Vegas Sands as well as the cruise operator Royal Caribbean and Norwegian lost up to twelve percent.
The paper of the “Aida” mother Carnival lost eleven percent after the rating agency Standard & Poor’s (S&P) lowered the company’s credit rating to “BB +” from “BBB-“. This lost the bonds of the world’s largest cruise operator the “Investment Grade” seal of approval.
Ibio’s shares, on the other hand, posted a gain of more than seven percent. IBM provides the biotech company with its artificial intelligence-based data analysis software, Watson Health, to accelerate the development of a coronavirus vaccine.
In the case of individual stocks, interest was also focused on Dell Technologies. The group, known for PCs and servers, could put the future of its software subsidiary VMWare to the test – and is considering a complete takeover in addition to a sale, according to the “Wall Street Journal”. Dell stocks jumped 8.4 percent and VMWare stocks rose 2.4 percent.
While the recent record rally for Nasdaq giants Microsoft and Apple paused for the time being, Amazon shares once again broke their latest record in early trading with an approach to the $ 2,800 mark. Wedbush Securities experts announced a target price of $ 3050. In the end, however, the titles of the online retail giant also fell by around one percent.
The prices of US government bonds, on the other hand, have turned mostly positive after initially slight losses. The weakness in risky assets such as equities, which resulted primarily from fears of a second wave of coronavirus, has supported bond stocks to some extent because of their role as a safe haven. The course fluctuations were kept within narrow limits.
The risk of a flare-up trade dispute between the United States and Europe was added as a brake on investors’ willingness to take risks. The US is considering new punitive tariffs on products from Germany, France, Spain and the UK. Beer, chocolate, olives, and gin, among others, could be affected, according to a statement by the U.S. trade commissioner late Tuesday evening. The selected goods had an import value of $ 3.1 billion in 2018, the release said.
Two-year bonds remained at 99 28/32 points. They paid 0.186 percent. Five-year bonds rose 2/32 to 99 22/32 points. They returned 0.314 percent. Trend-setting ten-year bonds rose 9/32 to 99 15/32 points. They paid 0.681 percent. Long bonds with a term of thirty years gained 1 4/32 to 95 10/32 points. They paid 1.442 percent.
More: This is how the trading day on the Frankfurt Stock Exchange went.