[Asia Economy New York=Correspondent Baek Jong-min] Major indices on the New York Stock Exchange closed mixed due to sluggish private employment. Robinhood surged 50% as options trading began and individual investors poured in. Cryptocurrency Bitcoin is attempting to break into the $40,000 range.
The founders of Robinhood are posing in front of the New York Stock Exchange. [Photo by Reuters Yonhap News]
On the 4th (local time), the Dow Jones Industrial Average fell 323.73 points (0.92%) to 34,792.67, the S&P 500 dropped 20.49 points (0.46%) to 4,402.66, and the Nasdaq rose 19.24 points (0.13%) to close at 14,780.53.
The major indices focused on the ADP private employment data and ISM’s Services Purchasing Managers’ Index (PMI) released before the market opened.
The announcement that private employment in July was only 330,000 was seen as easing concerns about the Federal Reserve’s early tapering. Expectations also grew that the Labor Department’s employment data to be released on the 6th would fall short.
On the other hand, the services PMI recorded an all-time high, reflecting strength in the service sector, but concerns over worsening employment had a greater impact on the market.
The 10-year Treasury yield fell from the previous day’s 1.17% range to 1.12% during the session, reflecting concerns about economic deterioration.
Concerns about economic recovery dragged down shares of cyclical stocks. Energy stocks including Chevron, as well as banks, Honeywell, and Coca-Cola all declined together.
General Motors (GM) shares fell more than 8% on news that earnings missed expectations. Pharmacy chain CVS Health rose 3% amid positive evaluations of its second-quarter results.
Kraft Heinz, which experienced a ketchup shortage, saw its stock drop 5%. Ride-sharing company Lyft reported strong earnings but its stock plunged 11%.
COVID-19 vaccine maker Novavax rose 18% on news of an agreement with the European Union (EU) for 200 million doses of its COVID-19 vaccine.
Robinhood shares surged more than 80% at one point before trading was halted, closing up 50.4% at $70. Analysts attribute the rise to individual investors chasing purchases and the start of options trading on Robinhood, which also drove the stock price higher.
Semiconductor stocks Nvidia and AMD also showed strength.
According to CoinMarketCap, Bitcoin is trading at $39,777, up 3.6%. Bitcoin was trading in the $37,000 range until the morning but then extended its upward momentum. Ethereum surged 8.4% to $2,707.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
