Covid-19 and Slow Economic Growth Pressured Wall Street
Major Wall Street indices were trading higher at the beginning of the trading session. However, midway, the trend reversed as fears around the Delta variant of Covid-19 weighed more on investor sentiment. Only the Nasdaq managed to stay on positive grounds. Still, it closed with a very slight climb, far from the session’s highs.
Economic data also cast doubts on the strength of the country’s growth. US manufacturing activity picked up in July, but the pace of growth slowed for the second month in a row. It happened when spending shifted away from goods to services, and a shortage of raw materials persisted.
The news impacted the yield on the 10-year Treasury bond, which hit 1.17%.
The country reached the goal of 70% of the immunized adult population, almost at a time when positive cases have risen to 100,000 in a single day, something not seen since February.
Dow Jones dropped by 0.28%
The Dow Jones slipped by 0.28% or 97.31 points, to 34,838.16. The selective S&P 500 fell by 0.18% or 8.10 units, to 4,387.16.
Meanwhile, the Nasdaq Market Composite Index rebounded a slight 0.06% or 8.39 integers to 14,681.07.
By sectors, the raw materials posted the biggest loss today, sliding by 1.17%. The industrial sector decreased by 0.73%, and energy companies dropped by 0.71%. At the same time, utilities saw the biggest gain adding 0.75%.
Among the 30 firms listed on the Dow Jones, most of the stocks ended in the red. Visa shed the most, losing 2.68%. It was followed by Dow Inc, slipping by 1.45% and McDonald’s, which lost 1.18%.
On the other hand, Goldman Sachs gained 0.83% and UnitedHealth advanced by 0.79%.
At the corporate level, finance technology firm Square soared by 10% after purchasing Australia’s Afterpay for $29 billion.
Nikkei closes lower due to coronavirus concerns
Japan’s Nikkei closed lower on Tuesday as rising Covid-19 cases weakened investor sentiment. Video game stocks fell after Chinese media labelled online gaming as spiritual opium and electronic drugs.
The Nikkei dropped by 0.5% to 27,641.83 points. Moreover, the broader Topix index lost 0.46% to 1,931.14 points.
According to Koichi Nosaka, a market analyst at Securities Japan, amid deteriorating investor sentiment, any price increase is likely to trigger a sell-off.
Nexon led the decline with a drop of 6.51%. Meanwhile, Oji Holdings slipped by 5.05%, and DeNA lost 3.88%.
The Tokyo market started with a rebound, and there were occasions when the rate of decline narrowed, but return sales pulled down the growth.
The market became cautious about the economic slowdown and the appreciation of the yen. Moreover, weak movements in the Shanghai and Hong Kong markets also weighed on investor sentiment. Among the 33 sectors on the Tokyo Stock Exchange, 29 sectors declined. Air transportation, mining, steel, oil and stone posted the highest rate of drop.
Fast Retailing and SoftBank Group, which have a significant index contribution, slipped today.
