The Dow Jones Industrial Average closed down 2.09% to settle at 33,962.04 points. And it is already far from the record that it recorded of 35.092 points in the session of last May 10th.
The Standard & Poor’s 500 fell 1.59% to 4,258.49 points. This is after it hit a new all-time high on Wednesday last week at 4,393.68 points.
On the other hand, the Nasdaq Technology Composite Index fell 1.06% to 14,274.98 points. And in intraday trading on the 14th of the month, it set the highest value ever at 14,814.69 points.
Concerns about a delta version of Covid-19, which could derail the global economic recovery, are causing investors to flee risky assets like stocks – and bet on safer values like liabilities.
Today, in the US, interest on 10-year Treasuries is trading at the lowest level in the past five months, below 1.20%.
This drop in debt interest rates, caused by increased investment in bonds, penalized listed companies in the financial sector, such as banks and insurance, which benefited earlier this year from higher yields.
Dow down 900 points
Market players are increasingly risk averse and the Dow Jones Index fell as much as 900 points during the session. At the close it lost 725.81 points (2.09%).
Thus, this was the worst day for the Dow since it dropped 943 points in late October. What is considered a barometer of the “preferred stock” market has seen several other significant declines since the start of 2020 due to concerns surrounding the pandemic.
The Dow has fallen more than 1,000 points six times in the past year, with five of those times arriving in March as the coronavirus entered the United States. The biggest point drop ever occurred on March 16, 2020, when it dropped nearly 3,000 points (13%).
Remember that the term “blue chips” was coined by Oliver Gingold, an employee of Dow Jones Corporation in 1923. Inspired by the most valuable poker chips, he coined the blue color to refer to high-priced stocks. Today, the term “leading” no longer refers to the most expensive stocks, but rather to stocks in high-profile companies that have stood the test of time.
Aviation, hospitality and energy in red
Aviation, hospitality and other sectors that will be most affected by the potential new restrictions arising from the Corona virus were among the biggest losses in today’s session, similar to what happened in the early days of the pandemic.
Shares of American Airlines, United and Delta all fell more than 4%. The cruise companies Carnival, Royal Caribbean and Norwegian sank between 4% and 6%.
Energy prices also fell, on the back of the sharp drop in oil prices after members of the Organization of the Petroleum Exporting Countries and their allies (the so-called OPEC + group) yesterday reached an agreement on their production volumes from August, which will bring more raw materials to the market.
Although the market is currently tight (with supply not keeping pace with demand growth), the fact that more “black gold” is entering at a time when the number of COVID-19 infections is causing new restrictions is making investors anxious.
Chevron and Exxon Mobil shares fell more than 8 percent.