[New York Close] Stocks Fall Across the Board Amid COVID Concerns... Bonds and Gold Rally

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market closed lower as negative factors spread. Safe-haven assets all increased in value.

On the 21st (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 227.57 points (0.78%) to 28,992.41, the S&P 500 dropped 35.48 points (1.05%) to 3,337.75, and the Nasdaq fell 174.37 points (1.79%) to 9,576.59. On a weekly basis, the Dow declined 1.38%, the S&P 500 1.25%, and the Nasdaq 1.59%, respectively.

On this day, the market was pressured by concerns over COVID-19, remarks from Federal Reserve (Fed) officials, and economic indicators.

Investor sentiment worsened as the number of new COVID-19 cases in China increased again on the 20th, and confirmed cases in Korea exceeded 200.

Economic indicators were also weak. According to market research firm IHS Markit, the preliminary February US Manufacturing Purchasing Managers' Index (PMI) (seasonally adjusted) was 50.8, down from the previous month's final figure of 51.9. The Services PMI fell from 53.4 in the previous month to 49.4.

Amid a preference for safe-haven assets, the US Treasury market saw the 30-year bond yield drop intraday to 1.892%, marking an all-time low. The 10-year Treasury yield also plunged by 5 basis points (1bp=0.01%), causing an inversion where the yield was lower than that of the 3-month bond. A decline in bond yields means bond prices rise.

The price of gold, a safe-haven asset, continued its upward trend. On the New York Mercantile Exchange, April delivery gold rose 1.8% ($28.30) from the previous day to $1,648.80 per ounce.

Fed officials have been consistently expressing positions to limit market expectations for interest rate cuts.

James Bullard, President of the Federal Reserve Bank of St. Louis, said that COVID-19, like other viruses, will subside and its impact on the economy will be temporary.

Raphael Bostic, President of the Federal Reserve Bank of Atlanta, also stated that the basic outlook is that the impact of COVID-19 will be temporary. He argued that there is no need for interest rate cuts given the current economic situation in the US.

Crude oil prices, which had recently been on the rise, showed weakness. On the New York Mercantile Exchange (NYMEX), April delivery West Texas Intermediate (WTI) crude oil closed down 0.9% ($0.50) at $53.38 per barrel.

It is assessed that the decline was fueled by news of conflicts between Saudi Arabia and Russia over whether to further cut oil production.