The Dow Jones has gained 5.8% this year while the S&P 500 has rallied 14.8% and the Nasdaq Composite comes off with the biggest pump with a 42.2% surge.
The news emanating from the United Kingdom has resulted in a plunge in the US stock market as shown in the Dow Jones Industrial Average (INDEXDJX: .DJI), the S&P 500 Index (INDEXSP: .INX) as well as in the Nasdaq Composite (INDEXNASDAQ: .IXIC). The news which revolves around the discovery of a new strain of the Coronavirus caused the plunging of the Dow by 0.52% to close at 30,021.10.
The S&P 500 dropped 29.62 points representing a 0.80% dip to 3,679.79 points while the Nasdaq Composite closed 12,557.52 with a dip of 198.12 representing a 1.55% dip. The losses fail to maintain the sheer gains the three major indices have recorded thus far in 2020 amid a COVID-19 strained economy. The Dow Jones has gained 5.8% this year while the S&P 500 has rallied 14.8% and the Nasdaq Composite comes off with the biggest pump with a 42.2% surge.
The industries which the new COVID-19 strain will likely impact such as the airline industry, the travels, and hoteling businesses are also responding with a worrying dump. American Airlines Group Inc (NASDAQ: AAL) is down 3.6% to $15.94 at the time of writing. Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) is down by 5.40% while Royal Caribbean Cruises Ltd (NYSE: RCL) is trading at a 4.01% loss.
“There was actually a lot of encouraging news this morning, although it’s being overshadowed (for now) by the gloomy headlines out of the U.K.,” wrote Vital Knowledge’s Adam Crisafulli in a note to clients. “The market has been in a tug-of-war between the very grim near-term COVID backdrop and the increasingly hopeful medium/long-term outlook (driven by vaccines) – the latter set of forces are more powerful in aggregate, but on occasion, the market decides to focus on the former, and stocks suffer as a result.”
Per Adam’s note, key market investors are moved out of impulse irrespective of the positive news that abounds, as the market is currently reflecting.
Dow Jones Plunge amid Coronavirus Pandemic as Stock Investors Aim to Take Profits
The first wave of the coronavirus stirred a pandemic that saw many businesses close down their operations. While many of such businesses are yet to recover from the economic hardship the COVID-19 plunged them into, the few who managed to stay profitable at this time will be looking to close in their profits, informing the general dip being seen in the market today.
While the remaining two weeks for the market to close this year will see a lot of uncertain reactions stirred by the COVID-19 news as well as the eventual rollout of a new $900 billion coronavirus stimulus package that has been agreed on by the US Congress, the hopes of a scheduled vaccine inoculation may help the market close the year on a more impressive level.
The new stimulus checks are set to be delivered next week as Treasury Secretary Steve Mnuchin told CNBC “Squawk Box.”
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.