By Anna Isaac and Ben Eisen
The Dow Jones Industrial Average dropped more than 800 points
Monday, extending the stock market's retreat into a fourth
Stocks charged higher for much of the summer, but sentiment has
soured in September. Investors are assessing an array of risks
including delays to additional fiscal-stimulus packages, an
increasingly heated U.S. election campaign season, continuing
tensions with China and the threat of renewed lockdowns in many
places because of higher coronavirus infections.
Meanwhile, shares of some of the largest technology companies,
which helped drive the market to records over the summer, are now
dragging it lower.
The blue-chip benchmark slid 2.7%, and the S&P 500 fell
2.1%. The tech-heavy Nasdaq Composite fell 1.7% after closing
Friday at its lowest level since Aug. 11.
The S&P 500 was off more than 7% from its Sept. 2 record
through Friday's close, while the Nasdaq Composite was down more
than 10%. The Dow has yet to reclaim its prepandemic high and was
about 6% below its February record.
Monday's selloff was broad, with all 11 sectors of the S&P
500 falling and 29 of 30 Dow components trading lower as well. The
broad index was led lower by the energy sector, which fell 4.3%,
and industrials group, down 3.5%.
In the Dow, American Express declined 6.1%, Honeywell
International fell 5.2% and 3M lost 4.9%.
A closely watched barometer of expected turbulence in U.S.
stocks, the Cboe Volatility Index, also jumped Monday to its
highest level in weeks.
Some investors sought safety in government bonds, pulling the
yield on the benchmark 10-year Treasury note down to 0.658% from
0.694% Friday. Bond prices and yields move in opposite
Brent crude, the international energy benchmark, dropped 4.2% to
$41.37 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 2.9% to $1,917.90 a
Bank stocks were also down broadly, with Wells Fargo and Morgan
Stanley both off almost 5%. Shares of JPMorgan Chase, the largest
U.S. bank by assets, fell 4.3% after news articles detailed
"suspicious activity reports" filed by it and other major banks to
U.S. authorities. Shares of HSBC Holdings, also named in the news
reports, hit a 25-year low in Hong Kong.
Elsewhere, shares of Oracle rose 1.9%. 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
Shares of Illumina dropped 8.2%. 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 23% 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.
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."
In Asia, most major stock benchmarks declined. Hong Kong's Hang
Seng Index retreated 2.1%, while China's Shanghai Composite ticked
down 0.6%. Japan was closed for a holiday.
Write to Anna Isaac at firstname.lastname@example.org and Ben Eisen at
(END) Dow Jones Newswires
September 21, 2020 11:46 ET (15:46 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.