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Wall Street sharply closed lower on Thursday on concerns of slowing pace of global and U.S. economic recovery. Resurgence of coronavirus in Asia and lower-than-expected economic data dented market participants' confidence. All the three major stock indexes ended in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was down 0.8% or 259.86 points to close at 34,421.93. Notably, 25 components of the 30-stock index ended in the red while 4 in green and 1 unchanged. In intraday trade, the blue-chip index was down more than 536 points. The tech-heavy Nasdaq Composite finished at 14,559.78, sliding 0.7% or 105.28 points due to weak performance by large-cap technology stocks.
The S&P 500 fell 0.9% to end at 4,320.82. The Financials Select Sector SPDR (XLF), the Materials Select Sector SPDR (XLB) and the Industrials Select Sector SPDR (XLI), the Communication Services Select Sector SPDR (XLC) and the Technology Select Sector SPDR (XLK) dropped 2%, 1.4%, 1.4%, 1.1% and 1%, respectively . All eleven sectors of the benchmark index closed in red.
The fear-gauge CBOE Volatility Index (VIX) was up 17.3% to 19. A total of 10.56 billion shares were traded on Thursday, lower than the last 20-session average of 10.65 billion. Decliners outnumbered advancers on the NYSE by a 3.13-to-1 ratio. On Nasdaq, a 1.98-to-1 ratio favored declining issues.
Concerns on Global Economic Recovery
Since the beginning of this week, investors' concerns have shifted from inflation to the slowing pace of global economic recovery. Several Asian countries have witnessed the resurgence of the highly infectious delta variant of the coronavirus. According to data compiled by Johns Hopkins University, the global death toll of novel coronavirus crossed 4 million on Jul 8. Total number of people infected by COVID-19 crossed 185 million across the world.
Japan has declared a state of emergency in Tokyo from Jul 12 to Aug 22 in order to curb the spread of the delta variant of COVID-19 infection. The summer Olympics games is scheduled in Tokyo from Jul 23 to Aug 8. Consequently, Olympic organizers are expected to ban all spectators from the Games.
Meanwhile, the yield of the 10-Year U.S. Treasury Note fell as low as 1.25% on Jul 7 before closing at 1.287%. The yield was around 1.58% at the starting of this month and was as high as 1.778% on Mar 30. A large section of market participants are concerned that falling yield on the long-term 10 year government bond is indicating slowing pace of global as well as U.S. economic recovery.
Biden Administration to Target Class 1 Railroads
The Wall Street Journal reported citing a an unidentified “person familiar with the situation” that “As part of a sweeping Executive Order expected this week, the Biden Administration will ask the Federal Maritime Commission and the Surface Transportation Board to combat what it calls a pattern of consolidation and aggressive pricing that has made it onerously expensive for American companies to transport goods to market.”
The Department of Labor reported that weekly jobless claims increased 2,000 to 373,000 for the week ended Jul 3, marking its lowest for the week ended Mar 14, 2020. Previous week's data was revised upwardly to 371,000. The consensus estimate was 354,000.
However, the continuing claims (those who have already received unemployment benefit) decreased 145,000 to 3.34 million for the week ended Jun 26. The four-week moving average (eliminating weekly volatility) for continuing claims, fell by 44,500 to 3.44 million, the lowest since the week ended March 2020.
The total number Americans receiving benefits across all types government programs decreased by 449,642 to 14.2 million for the week ended Jun 19 However, nearly 6.68 million workers are yet to return to the job market compared with the pre-pandemic level.
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Stock Market News for Jul 9, 2021
Wall Street sharply closed lower on Thursday on concerns of slowing pace of global and U.S. economic recovery. Resurgence of coronavirus in Asia and lower-than-expected economic data dented market participants' confidence. All the three major stock indexes ended in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was down 0.8% or 259.86 points to close at 34,421.93. Notably, 25 components of the 30-stock index ended in the red while 4 in green and 1 unchanged. In intraday trade, the blue-chip index was down more than 536 points. The tech-heavy Nasdaq Composite finished at 14,559.78, sliding 0.7% or 105.28 points due to weak performance by large-cap technology stocks.
The S&P 500 fell 0.9% to end at 4,320.82. The Financials Select Sector SPDR (XLF), the Materials Select Sector SPDR (XLB) and the Industrials Select Sector SPDR (XLI), the Communication Services Select Sector SPDR (XLC) and the Technology Select Sector SPDR (XLK) dropped 2%, 1.4%, 1.4%, 1.1% and 1%, respectively . All eleven sectors of the benchmark index closed in red.
The fear-gauge CBOE Volatility Index (VIX) was up 17.3% to 19. A total of 10.56 billion shares were traded on Thursday, lower than the last 20-session average of 10.65 billion. Decliners outnumbered advancers on the NYSE by a 3.13-to-1 ratio. On Nasdaq, a 1.98-to-1 ratio favored declining issues.
Concerns on Global Economic Recovery
Since the beginning of this week, investors' concerns have shifted from inflation to the slowing pace of global economic recovery. Several Asian countries have witnessed the resurgence of the highly infectious delta variant of the coronavirus. According to data compiled by Johns Hopkins University, the global death toll of novel coronavirus crossed 4 million on Jul 8. Total number of people infected by COVID-19 crossed 185 million across the world.
Japan has declared a state of emergency in Tokyo from Jul 12 to Aug 22 in order to curb the spread of the delta variant of COVID-19 infection. The summer Olympics games is scheduled in Tokyo from Jul 23 to Aug 8. Consequently, Olympic organizers are expected to ban all spectators from the Games.
Meanwhile, the yield of the 10-Year U.S. Treasury Note fell as low as 1.25% on Jul 7 before closing at 1.287%. The yield was around 1.58% at the starting of this month and was as high as 1.778% on Mar 30. A large section of market participants are concerned that falling yield on the long-term 10 year government bond is indicating slowing pace of global as well as U.S. economic recovery.
Biden Administration to Target Class 1 Railroads
The Wall Street Journal reported citing a an unidentified “person familiar with the situation” that “As part of a sweeping Executive Order expected this week, the Biden Administration will ask the Federal Maritime Commission and the Surface Transportation Board to combat what it calls a pattern of consolidation and aggressive pricing that has made it onerously expensive for American companies to transport goods to market.”
Following the news, shares of major class 1 freight rail operators such as Union Pacific Corp. (UNP - Free Report) , CSX Corp. (CSX - Free Report) and Kansas City Southern tumbled 4.4%, 6.2% and 7.9%, respectively. All these stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Department of Labor reported that weekly jobless claims increased 2,000 to 373,000 for the week ended Jul 3, marking its lowest for the week ended Mar 14, 2020. Previous week's data was revised upwardly to 371,000. The consensus estimate was 354,000.
However, the continuing claims (those who have already received unemployment benefit) decreased 145,000 to 3.34 million for the week ended Jun 26. The four-week moving average (eliminating weekly volatility) for continuing claims, fell by 44,500 to 3.44 million, the lowest since the week ended March 2020.
The total number Americans receiving benefits across all types government programs decreased by 449,642 to 14.2 million for the week ended Jun 19 However, nearly 6.68 million workers are yet to return to the job market compared with the pre-pandemic level.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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