Dow Bleeds on Growing Lockdown Fears

This post was originally published on this site – The Dow nursed heavy losses Wednesday on growing worries about the recovery of the global economy as Covid-19 cases continued to spike, with parts of Europe set to resume lockdown measures.

The Dow Jones Industrial Average fell 3.01%, or 825 points. The S&P 500 was down 2.98%, while the Nasdaq Composite slumped 2.94%.

France is expected to impose a lockdown to stem a surge in infection in recent weeks, according to Reuters. Germany, the engine of the euro-area economy, said it would begin a one-month partial lockdown starting Monday.

In the U.S., meanwhile, there are signs some areas are considering rolling back the easing of lockdown measures after Chicago prohibited indoor dining.

Global infections have topped 44 million, with more than 350,000 cases reported a day earlier.

The selling in the broader market was led by technology as stalwarts come under the spotlight on Capitol Hill ahead of key earnings reports from Amazon, Facebook, and Google.

The chief executives of Facebook, Twitter and Google are making their case to lawmakers to uphold section 230 of the Communications Decency Act, a law that protects platforms against legal liability for content generated by its users.

Apple (NASDAQ:AAPL), (NASDAQ:AMZN), Facebook (NASDAQ:FB) (NASDAQ:GOOGL) and Microsoft  (NASDAQ:MSFT) were deep in the red, with latter down 4% despite firmer quarterly results.

Wall Street, however, continued to give Microsoft their vote of confidence as its cloud business continued to grow.

“Overall, we believe Microsoft’s results (especially post SAP’s guide down) will assuage some investor concerns around the IT spending backdrop,” Credit Suisse (SIX:CSGN) said after raising its price target on the stock to $235 from $225.

With the impact of the pandemic gathering pace, cyclical stocks – those linked to the economy – also played a meaningful role in the selloff, with consumer discretionary and energy among the biggest decliners.

Energy fell nearly 3%, led by a sharp decline in oil prices as data showing a larger-than-expected weekly build in U.S. inventories exacerbated concerns about the demand outlook.

Industrials continued to bleed, led by fall in airlines, with United Airlines (NASDAQ:UAL) and Boeing (NYSE:BA) falling more than 3% despite the latter reporting a smaller than expected loss of $1.39 per share for the third quarter.

General Electric (NYSE:GE) sidestepped the selling, up 7% after reporting a surprise third-quarter profit.

Elsewhere on the earnings front, United Parcel Service Inc (NYSE:UPS) fell 8% as a lack of guidance and higher costs overshadowed third-quarter results that topped analysts’ estimates.