Tech stocks like Apple and Tesla attempt rebound after shedding weakness
[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market plunged sharply amid a series of adverse factors. Investments poured into the dollar, causing chaos with gold prices and oil prices also plummeting.
On the 21st (local time), the New York financial market was shaken significantly due to concerns over strengthened lockdowns in Europe amid the spread of the novel coronavirus infection (COVID-19), money laundering suspicions involving major banks, and the possibility of delays in economic stimulus legislation due to conflicts over the nomination of a new Supreme Court justice.
The Dow Jones Industrial Average fell 509.72 points (1.84%) to 27,147.70, the S&P 500 index dropped 38.41 points (1.16%) to 3,281.06, and the Nasdaq index closed down 14.48 points (0.13%) at 10,778.80. The Dow index experienced its largest intraday drop since June, falling more than 3% at one point.
Financial stocks such as JP Morgan and American Express plunged collectively, leading the Dow's decline. This was influenced by the International Consortium of Investigative Journalists (ICIJ) revealing, after analyzing Suspicious Activity Reports (SAR) from the U.S. Financial Crimes Enforcement Network (FinCEN), that global banks have conducted large-scale suspicious illegal transactions amounting to about 2 trillion dollars over a long period.
The death last week of Ruth Bader Ginsburg, U.S. Supreme Court Justice, has intensified political conflicts in the U.S., making agreement on economic stimulus measures even more difficult, according to some assessments.
The recovery of tech stocks was positive. Apple shares rose about 3%, breaking away from recent weakness. Tesla, ahead of its Battery Day, increased by 1.64%. Amazon and Microsoft also closed higher, showing signs of stabilization after recent sharp declines in tech stocks.
Hydrogen truck company Nikola, embroiled in fraud allegations, saw its stock fall 19% after its founder announced his resignation.
As the preference for safe-haven assets intensified, the value of the U.S. dollar soared. The pound plummeted as the UK considered lockdowns due to a resurgence of COVID-19, leading to a rise in the dollar. The Dollar Index, which shows the dollar's value against major currencies, rose 0.66% to around 93.5.
Along with the dollar, U.S. Treasury prices, another representative safe asset, also strengthened. The yield on the 10-year U.S. Treasury note fell to as low as 0.649% during the day. A decline in Treasury yields means a rise in Treasury prices.
The strong dollar dragged down gold prices. December delivery gold closed at $1,910.60 per ounce, down 2.6% ($51.50). During the session, the $1,900 level was breached.
Concerns over reduced demand due to the resurgence of COVID-19 in Europe also caused international oil prices to plunge. October delivery West Texas Intermediate (WTI) crude oil closed down 4.4% ($1.80) at $39.31 per barrel. The possibility of increased oil production in Libya also contributed to the decline in oil prices.
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