Consumers are selecting wines at a wine shop in Oakville, California. On this day, Gavin Newsom, Governor of California, ordered the suspension of operations not only for dine-in restaurants but also for bars, wineries, and theaters. [Photo by AP News]
[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market was hit by California's suspension of economic activity reopening measures and failed to maintain its upward momentum. While the Dow Jones Industrial Average maintained its gains, major tech stocks plummeted, causing the S&P 500 to reverse into a decline and the Nasdaq to show a sharp drop.
On the 13th (local time), the Dow Jones Industrial Average closed at 26,085.80, up 10.5 points (0.04%), but the S&P 500 index fell 29.82 points (0.94%) to 3,155.22, and the Nasdaq index plunged 226.60 points (2.13%) to 10,390.84.
Major indices started strong on the day, buoyed by news before the opening that Pfizer and BioNTech's jointly developed COVID-19 vaccine candidate had received 'Fast Track' approval from the U.S. Food and Drug Administration (FDA).
Electric vehicle maker Tesla's stock soared more than 16% at one point amid expectations of its inclusion in the S&P 500 index. Tesla also entered the top 10 U.S. companies by market capitalization.
The situation changed in the afternoon when California announced measures to suspend dine-in services at restaurants statewide and to close bars, gyms, and theaters. After this news, Tesla's stock gave up all its gains and turned downward. Microsoft and Amazon also surrendered their early gains and closed down more than 3%. Apple also closed lower.
Wall Street interpreted California's suspension of economic reopening measures?despite its GDP ranking fifth globally compared to major countries?as triggering profit-taking selling after a short-term surge.
U.S. Secretary of State Mike Pompeo's statement on the same day, declaring China's territorial claims in the South China Sea illegal, was also cited as a factor worsening investor sentiment.
WTI closed down 1.1% ($0.45) at $40.10 per barrel. August gold futures rose 0.7% ($12.20) to close at $1,814.10 per ounce.
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