Stock Losses Accelerate; Dow Drops More Than 800 Points
By Anna Isaac
The Dow Jones Industrial Average dropped more than 800 points in
Monday trading, extending the market's retreat into a fourth
The blue-chip benchmark slid 835 points, or 3%. The S&P 500
fell 2.6%, led by shares of energy and materials companies. The
Nasdaq Composite fell 2.3%. The tech-heavy index closed on Friday
at its lowest level since Aug. 11.
A closely watched barometer of expected turbulence in U.S.
stocks, the Cboe Volatility Index, also jumped Monday to its
highest level in almost two weeks.
Some of the largest technology companies, which helped drive the
market to record highs over the summer, are now dragging it down.
Sentiment has soured as investors assess an array of risks
including delays to additional fiscal-stimulus packages, an
increasingly heated U.S. election campaigning season, continuing
tensions with China, and the threat of renewed lockdowns in many
places because of higher coronavirus infections.
Over the weekend, China's Ministry of Commerce laid out
penalties for companies and individuals it deems to be "unreliable
entities," including potential restrictions on staffing and
investment in China, curbs on imports and exports, and fines.
The list is aimed at identifying foreign entities and
individuals that could harm Chinese interests. No names have thus
far been disclosed. The development is likely to add another stress
point to the already strained relations between the U.S. and China,
as it signals Beijing may step up retaliatory measures, investors
"There's the broader macro risk that this might be China
starting to become more combative in its use of sanctions," said
Edward Park, deputy chief investment officer at Brooks Macdonald.
"That wasn't really on the markets' radar."
Overseas, the pan-continental Stoxx Europe 600 fell 3.2%, led
lower by sharp drops in the banking and travel and leisure sectors.
The gauge is on track for its lowest closing level since the end of
July. Coronavirus cases have been rising across major European
economies, leading to speculation that governments will be forced
to implement new lockdowns that will curtail business and social
activity across the region.
"The worry is definitely that we're going to see restrictions on
economies and that's going to have a big negative impact going
forward," said Altaf Kassam, head of investment strategy for State
Street Global Advisors in Europe. "There's the noise from
politicians across Europe on the threat of further lockdown, that
we've reached a tipping point on the rate of infections."
Apprehension about additional new restrictions in London sent
the FTSE 100 index down 3.1%
Shares of JPMorgan Chase fell 3.8% in early trading after news
articles detailed "suspicious activity reports" filed by it and
other major banks to U.S. authorities.
Shares in Oracle rose 1.6%. President Trump said he has agreed
in concept to a deal under which Chinese-owned video-sharing app
TikTok will partner with Oracle and Walmart to become a U.S.-based
company, capping negotiations that have stirred debate over
national security and the future of the internet. The Commerce
Department said it would delay a ban on U.S. downloads and updates
for the TikTok app that was set to take effect at 11:59 p.m.
Shares in Illumina dropped 6.4%. The maker of machines that
sequence genes will pay $7.1 billion in cash and stock for a
developer of a long-sought blood test that promises to detect canc
er early, people familiar with the matter said.
Nikola's stock plummeted 18.4% after it was reported that
founder and Executive Chairman Trevor Milton is stepping down from
the electric-truck startup amid allegations from a short seller
that he and the company had made false statements to investors.
In Asia, most major stock benchmarks fell by the close of
trading. Hong Kong's Hang Seng Index retreated 2.1%, while China's
Shanghai Composite ticked down 0.6%. Japan was closed for a
Brent crude, the international energy benchmark, dropped 2.8% to
$40.14 a barrel. Analysts said the drop was triggered by signals
that Libya could renew its supply of oil to the global market at a
time when demand for oil has dropped. Gold fell 2.3% to $1,917.90 a
In bond markets, the yield on the benchmark 10-year Treasury
ticked down to 0.651%, from 0.694% Friday.
Write to Anna Isaac at email@example.com
(END) Dow Jones Newswires
September 21, 2020 10:54 ET (14:54 GMT)
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