Dow Jones today: What is happening to the stock markets? £100billion wiped off
The number of coronavirus cases has risen to more than 80,000 worldwide and has caused over 2,700 deaths. The deadly Covid-19 virus has started to spread faster in Europe with parts of Italy now under quarantine and there are confirmed cases in the US.
What is happening to the stock markets?
The US stock market recovered in early trading on Wednesday with steady rises.
The coronavirus outbreak had caused the worst two-day losing streak on Wall Street in two years.
The tech sector had been among the worst hit because certain companies rely on global sales and supply chains that could be stifled by the spreading coronavirus.
On Wednesday, tech companies led the way in stock increases with a 1.5 percent rise for Microsoft and a 1.8 percent surge for Adobe.
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Health care companies also climbed with UnitedHealth Group rising 1.9 percent.
Bond prices fell and pushed yields higher. The yield on the 10-year Treasury rose to 1.36 percent from 1.33 percent late Tuesday.
TJX surged 7.7 per cent after beating Wall Street’s fourth-quarter profit forecasts and raising its dividend.
Utilities and real estate companies lagged the market suggesting that investors were moving away from safe-play stocks.
But in Europe the dire week continued with the FTSE 100 Index in London down 0.7 percent taking the total wiped off UK blue chips to nearly £100 billion since Monday.
The FTSE has now fallen below 7,000 for the first time in more than a year.
The Cac 40 in France fell by 0.8 percent and the Dax in Germany saw a 1.1 percent drop.
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Italy saw a 45 percent increase in confirmed coronavirus cases in 24 hours.
There are concerns in Italy that the outbreak could cause Europe’s fourth-largest economy to tip into recession.
The men and women’s Six Nations matches between Italy and Ireland in Dublin have been postponed for public safety reasons.
Elsewhere in Europe, new Covid-19 cases were confirmed in Austria, Switzerland and Spain, while France confirmed its second death on Wednesday, and Greece confirmed its first case.
On Wednesday, the pan-European Stoxx 600 provisionally closed slightly below its flatline, trimming some earlier losses.
Stocks in leisure and travel performed the worst by dropping more than two percent.
Travel stocks and airlines suffered on the FTSE in London, with holiday firm Tui and low-cost carrier easyJet declining for a third day in a row.
British drinks giant Diageo has warned the virus has cost the company £200 million this year because demand for the likes of their Gordon’s gin and Captain Morgan in Asia has dropped.
Jasper Lawler, head of research at LCG, said investors were rushing for the exit as “nobody’s willing to ‘catch a falling knife’’.
He said: “We’ve now had two seismic daily declines on global stock markets.
“Short-term traders may well choose to grit their teeth for a short-covering rally, but we’re getting the impression institutional investors are materially reassessing their outlook for stocks.”
Russ Mould, investment director at AJ Bell, said: “The correction for equities reflects the reality that the impact of this outbreak is likely to be far-reaching and lead to pressure on companies’ revenue and earnings.”
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