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Stocks plunge again as COVID-19 surge continues across US

Stocks plunge again as COVID-19 surge continues across
US 1

US stocks appeared poised for another sharp selloff Wednesday amid a continued surge in coronavirus infections that’s shown no signs of slowing down soon.

Futures contracts tied to the Dow Jones industrial average were down 454 points, or 1.6 percent, at 26,911.00 as of 6:55 a.m. with both COVID-19 cases and hospitalizations on the rise across the country.

That put the blue-chip index on pace for its third straight day of losses along with the benchmark S&P 500, whose futures were down 1.4 percent as of 6:56 a.m. Futures for the tech-heavy Nasdaq 100 were recently off about 1.1 percent following a 0.8 percent gain on Tuesday.

The US has posted a record average of 71,532 new coronavirus cases over the past seven days as the deadly pandemic climbed toward a third peak, according to data from the COVID Tracking Project. The number of people currently hospitalized with the virus has also risen sharply over the past month to 44,212 as of Tuesday, the data show.

The spike has raised fears about the return of lockdown measures like those that kneecapped the global economy in the spring. Struggling European countries have imposed restrictions in recent weeks, and Illinois officials will cut off indoor restaurant and bar service in Chicago on Friday amid a surge in infections there.

European markets also plummeted Wednesday following reports that France could impose a nationwide lockdown to stem the tide of the virus. Paris’s CAC 40 index was recently down 2.6 percent, while London’s FTSE 100 was off 1.5 percent.

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“Mainland European markets are once again at the forefront of a collapse in equity valuations, with a second bout of nationwide lockdowns raising the chance of a double-dip recession,” said Joshua Mahony, senior market analyst at IG. “While regional action helped alleviate much of the negative market impact in recent months, the sharp ascent in COVID cases throughout Europe clearly calls for more dramatic measures.”

The drop in stocks came alongside a jump in the CBOE Volatility Index, known as Wall Street’s “fear gauge.” It had climbed to 36.35 as of 6:56 a.m., reaching its highest level since early September as the Nov. 3 presidential election approached.

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