Asia Morning: U.S. Stocks Knocked by Bears, Dow Sinks 7%

,

Investors were concerned about a resurgence in coronavirus infections and discouraged by the Federal Reserve's warning of a slower economic recovery...

Trading floor 2

On Thursday, U.S. stocks suffered the worst sell-off since March 16, as investors were concerned about a resurgence in coronavirus infections and discouraged by the Federal Reserve's warning of a slower economic recovery. The Dow Jones Industrial Average slumped 1861 points (-6.9%) to 25128, the S&P 500 fell 188 points (-5.9%) to 3002, and the Nasdaq 100 was down 505 points (-5.0%) to 9588.


S&P 500 Index: Daily Chart


Source: GAIN Capital, TradingView


All of the S&P's sectors ended in negative territory, led by Banks (-9.6%), Energy (-9.45%) and Automobiles & Components (-9.26%).


Energy companies such as Oneok (OKE -15.84%), Occidental Petroleum (OXY -16.14%) and Halliburton (HAL -15.37%) plummeted as oil prices plunged 8%.

Travel stocks such as Norwegian Cruise Line (NCLH -16.46%), American Airlines (AAL -15.51%) and Delta Air Lines (DAL -14.03%) also lost big.

On the technical side, about 51.7% (58.3% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 93.3% (93.3% in the prior session) were above their 20-day moving average.

U.S. official data showed that Initial Jobless Claims fell to 1.542 million for the week ended June 6 (1.550 million expected), and Continuing Claims decreased to 20.929 million for the week ended May 30 (20.000 million expected). Producer Prices increased 0.4% on month in May (+0.1% expected), 

Due later today is the University of Michigan's Consumer Sentiment Index (June preliminary reading, an increase to 75.0 expected).

European stocks were heavy yesterday, with the Stoxx Europe 600 Index shedding 4.1%. Germany's DAX sank 4.5%, France's CAC slumped 4.7%, and the U.K.'s FTSE 100 lost 4.0%.

U.S. government bonds were in demand for their haven appeal. The benchmark 10-year Treasury yield slid to 0.651% from 0.744% Wednesday.

Spot gold retreated $9.00 (-0.6%) to $1,727 an ounce, ending a three-day rebound.

Oil prices tumbled as market sentiment deteriorated sharply. U.S. WTI crude oil futures (July) plunged 8.2% to $36.34 a barrel.

On the forex front, the ICE U.S. Dollar Index rebounded 0.7% on day to 96.81, halting a three-day decline, amid risk-off sentiment.

EUR/USD slid 0.7% to 1.1295. The eurozone's April industrial production will be reported later in the day (-20.0% on month expected).

GBP/USD plunged 1.3% to 1.2580. Later today, U.K. monthly GDP growth for April (-18.7% on month expected), industrial production (-15.0% on month expected) and manufacturing production (-15.6% on month expected) will be released.

USD/JPY dipped 0.3% to 106.81, posting a four-day losing streak.

More from Indices

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.