China COVID cases weigh on Wall St; Disney jumps
- Disney up on Iger’s return as CEO
- S&P 500 energy index leads sectoral falls
- Grindr slips after rocketing in debut
- Tesla down on vehicle recall, China COVID concerns
- Dow up 0.01%, S&P 500 down 0.34%, Nasdaq down 1.05%
Nov 21 (Reuters) – Wall Street’s main indexes started the week roughly lower on China saying it faced its most severe test of the coronavirus pandemic, but trimmed losses after the San Francisco Federal Reserve President Mary Daly commented that officials need to be careful to avoid a “painful downturn.”
Given that markets have priced in a monetary policy setting that is well beyond what the Fed has imposed on the economy so far, Daly said on Monday “it will be important to remain conscious of this gap between the federal funds rate and the tightening in financial markets. Ignoring it raises the chances of tightening too much.”
By 2:20 p.m. ET, the Dow Jones Industrial Average (.DJI) was up 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 (.IXIC) dropped 102.38 points, or 0.92%, to 11,043.68.
Beijing said on Monday it would shut businesses and schools in hard-hit districts and tighten rules for entering the city, as infections ticked higher, spooking investors. read more
“There is this fear that China might reinstitute some of the COVID restrictions that they’ve just purportedly started to lift,” said Carol Schleif, deputy chief investment officer at BMO Family Office. “That’s a piece of what’s driving the tech stocks down because we rely so much on China and Taiwan for critical components.”
U.S. casino operators with businesses in China including Wynn Resorts Ltd (WYNN.O), Las Vegas Sands Corp (LVS.N), MGM Resorts International (MGM.N) and Melco Resorts & Entertainment Ltd slipped between 2.5395% and 7.6043%.
The S&P 500 energy sector index (.SPNY) slid almost 3% on Monday to its lowest level in four weeks as oil prices tumbled more than 5% after a report that Saudi Arabia and other OPEC oil producers were discussing an output increase. The index, however, pared losses after Saudi Arabia denied talks about it.
Energy was the only major S&P 500 sector eying gains for the year, surging around 63%.
Walt Disney Co (DIS.N) jumped 5.7898% after Bob Iger’s return as chief executive to the entertainment giant.
The S&P 500 extended its fall from the previous week when multiple Federal Reserve officials reiterated the central bank’s pledge to raise rates until inflation was in check, as investors now await the release of minutes from the Fed’s November meeting on Wednesday.
Traders are widely betting on a 50-basis point hike in the December meeting, with a peak for rates expected in June.
Among other stocks, Tesla Inc (TSLA.O) shed -6.6374% after the electric-car maker said it will recall vehicles in the United States over an issue that may cause tail lights to intermittently fail to illuminate.
Gay dating app Grindr (GRND.N) plummeted amid a broader market weakness, after skyrocketing in its debut on the New York Stock Exchange in the previous session.
Trading 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 day on Friday.
Declining issues outnumbered advancing ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.57-to-1 ratio favored decliners.
The S&P 500 posted 9 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 76 new highs and 194 new lows.
Reporting by Ankika Biswas, Shubham Batra and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur, Shounak Dasgupta and Grant McCool
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