China coronavirus cases weigh on Wall Street; Disney jumps
- Disney on Iger’s return as CEO
- The S&P 500 Energy Index is leading the sectoral declines
- Grindr slips after its rocket launch
- Tesla backtracks on car recall, China fears coronavirus
- Dow Jones up 0.01%, S&P 500 down 0.34%, Nasdaq down 1.05%
(Reuters) – Wall Street’s major indexes started the week almost lower on China saying it faced its toughest test of the coronavirus pandemic, but pared losses after San Francisco Federal Reserve Chair Mary Daley commented that officials needed to be careful to avoid a “painful deflation.”
As markets have set in to position monetary policy far beyond what the Fed has imposed on the economy thus far, “it’s going to be important to remain aware of this gap between the federal funds rate and the tightening in the financial markets,” Daley said Monday. And ignoring it increases the chances of stressing out too much.”
By 2:20 p.m. ET, the Dow Jones Industrial Average (.DJI) rose 37.97 points, or 0.11%, to 33,783.66, the S&P 500 (.SPX) lost 8.85 points, or 0.22%, to 3,956.49, and the Nasdaq Composite Index (. .IXIC) by 102.38 points, or 0.92%, to 11,043.68 points.
Beijing said on Monday it would close businesses and schools in the hardest-hit areas and tighten rules for entering the city, as the number of infections soared, spooking investors. Read more
“There is this fear that China may re-impose some of the COVID restrictions that they are allegedly just beginning to lift,” said Carol Schliffe, deputy chief investment officer at BMO Family Office. “That’s part of what’s driving technology stocks lower because we depend so much on China and Taiwan for critical components.”
US casino operators with companies in China including Wynn Resorts Ltd (WYNN.O), Las Vegas Sands Corp (LVS.N), MGM Resorts International (MGM.N) and Melco Resorts & Entertainment Ltd fell between 2.5395% and 7.6043. %.
Shares of travel companies including American Airlines Group Inc (AAL.O) and Norwegian Cruise Line Holdings Ltd (NCLH.N) fell 1% and 1.2%, respectively.
The Standard & Poor’s 500 (.SPNY) energy sector index fell nearly 3% Monday to a four-week low as oil prices fell more than 5% after a report that Saudi Arabia and other OPEC oil producers are discussing increasing production. But the index cut its losses after Saudi Arabia denied holding talks about it.
The energy sector has been the main S&P 500 sector chasing gains this year, up about 63%.
Walt Disney (DIS.N) stock jumped 5.7898% after Bob Iger returned as CEO of the entertainment giant.
The S&P 500 extended its decline from the previous week when several Fed officials reiterated the central bank’s pledge to raise interest rates until inflation is brought under control, as investors now await the release of minutes from the November Federal Reserve meeting on Wednesday.
Traders are widely betting on a 50 basis point rate hike at the December meeting, with interest rates peaking in June expected.
Among other stocks, Tesla Inc (TSLA.O) fell -6.6374% after the electric car maker said it would recall vehicles in the United States over an issue that could cause the taillights to fail to illuminate intermittently.
Gay dating app Grindr (GRND.N) is down amid broader market weakness, after it jumped to debut on the New York Stock Exchange in the previous session.
Volumes are likely to be thin this week as markets will be closed on Thursday for the Thanksgiving holiday and will be open for half a day on Friday.
Low issues outnumbered high issues on the NYSE by a ratio of 1.26 to 1; On the Nasdaq, the ratio was 1.57 to 1 in favor of declining stocks.
S&P 500 records 9 new 52-week highs and 2 new lows; The Nasdaq index posted 76 new highs and 194 new lows.
Additional reporting by Anika Biswas, Shubham Batra and Shriyashi Sanyal in Bengaluru; Editing by Arun Koyoor, Shonak Dasgupta, and Grant McCall
Our Standards: The Thomson Reuters Trust Principles.
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